Rent per acre for ground solar?

[warksfarmer]

When it comes to effectively giving away 18ha which is what I was looking at and with all the risks then yes glass 3/4 empty actually.

 

[Exfarmer]

I am staggered at the idea this is not a good deal
£1000 an acre inflation adjusted
At the end you want to keep the panels
They will still be producing and yours to sell to who you like or use

 

[warksfarmer]

I am staggered at the idea this is not a good deal
£1000 an acre inflation adjusted
At the end you want to keep the panels
They will still be producing and yours to sell to who you like or use

I've got my own solar installation on top of one of my sheds which I own. All costs are factored into the venture and the 34.9p FIT.

However when it comes to leasing out 45 acres of land its not so straight forward and comes with far to many risk for me at the offered price, but thats just my opinion. You guys go for it.

I have spoken to two tax advisors, two accountants and a planning expert with regards to inheritance, annual accounts due to leasing and about potential ratings. Then add in the SFP question which I get different answers each time I ask it, then the fact that the company who I do a deal with, would be sold on at least 2 times in the 25 yr period which they freely admit. I am also concerned about being left with 30 acres of panels to dispose of.

To risky for me unless the stakes are upped.

 

[Exfarmer]

firstly if it is the loss of land you are worried about go and buy another 45 acres
the rent will pay for it probably in 12 years
and why worry about disposing of the panels
they will still be producing huge amounts of electricity in the order of 40million units per year
at present rates, on just export tarriff of 4p, could give a potential income after the 25 years of £1,600,000 per year
and this is before inflation
of course their will be issues of inverters etc but you should insist in the agreement that
1. All rents are upwards only
2 in the event of bankruptcy, or breaking of terms and conditions, all equipment etc revert to you the landlord

3 at the end of agreement all equipment must either be removed or handed over to you in good working order

i would specify that in the last year all income must be moved to a separate fund to guarantee that the previous clause is kept

 

[jumbojimbo]

pm sent

 

[Clive]

You can buy land at less than £800/ac over 25 years

Why on earth would someone pay that much to rent it ?

Bonkers maths in ths thread !

 

[warksfarmer]

You can buy land at less than £800/ac over 25 years

Why on earth would someone pay that much to rent it ?

Bonkers maths in ths thread !

Purely because these solar companies build up a portfolio of solar arrays at 'X' pounds. To then sell them on. If the solar arrays are valued at 'X' amount and then they have to try to sell the land on top of that it may put the investors or potential buyers off.

I spoke to 3 different companies that were interested in our site and all of them freely admitted all they were doing was setting the arrays up and when they had hit the target figure of system, they then would sell it on because all they are doing is basically selling the FIT which is fixed as well as a long term lease on some secure ag farmland.

And its only just feasible to buy at under £800/ac here. 45ac @ £12,000/ac (current local price being paid as of last week) via AMC is £32,500/year interest & loan repayment over 25 years = £720/acre.

 

[Clive]

Purely because these solar companies build up a portfolio of solar arrays at 'X' pounds. To then sell them on. If the solar arrays are valued at 'X' amount and then they have to try to sell the land on top of that it may put the investors or potential buyers off.

I spoke to 3 different companies that were interested in our site and all of them freely admitted all they were doing was setting the arrays up and when they had hit the target figure of system, they then would sell it on because all they are doing is basically selling the FIT which is fixed as well as a long term lease on some secure ag farmland.

But where is the sense in them renting at MUCH more rent than they could service a loan on the land at ? Surely their business looks more attractive if it has a land asset base invested in as well as solar production ?

There must be a dam good reason they don't want to own the land because from a ££ point of you in makes no sense at all for them to rent

Another way to look at as a farmer is rent your entire farm at that price - use the rent to buy as much land agin and service the loan for 25years

You children will have a farm double the size in 25years and it won't have cost you a Penney !


In fact just doing some quick sums these rents are close to x3 the level you could buy at so in fact you could buy 3ac for every one rented !

 

[Andrew K]

But where is the sense in them renting at MUCH more rent than they could service a loan on the land at ? Surely their business looks more attractive if it has a land asset base invested in as well as solar production ?

There must be a dam good reason they don't want to own the land because from a ££ point of you in makes no sense at all for them to rent

Another way to look at as a farmer is rent your entire farm at that price - use the rent to buy as much land agin and service the loan for 25years

You children will have a farm double the size in 25years and it won't have cost you a Penney !


In fact just doing some quick sums these rents are close to x3 the level you could buy at so in fact you could buy 3ac for every one rented !

Spoken like a man with two sons to set up Clive!

I think they rent for the reasons mentioned ,plus the fact that land available to buy is often too far from the grid or has security considerations, poor aspect for light capture, location not ideal etc.
Renting allows a bit more cherry picking of the better sites IMO.
Must agree, buying of the ideal site makes better sense to farmers especially.

 

[7800]

Purely because these solar companies build up a portfolio of solar arrays at 'X' pounds. To then sell them on. If the solar arrays are valued at 'X' amount and then they have to try to sell the land on top of that it may put the investors or potential buyers off.

I spoke to 3 different companies that were interested in our site and all of them freely admitted all they were doing was setting the arrays up and when they had hit the target figure of system, they then would sell it on because all they are doing is basically selling the FIT which is fixed as well as a long term lease on some secure ag farmland.

And its only just feasible to buy at under £800/ac here. 45ac @ £12,000/ac (current local price being paid as of last week) via AMC is £32,500/year interest & loan repayment over 25 years = £720/acre.

Presume your loan figures are at a variable rate and as rates will go up within the next 25 years it will cost more than £720/acre ?

 

[Against_the_grain]

Why would they want to buy the land and tie up all that capital? Also land values are potentially exposed to market fluctuations, whereas the fits are guaranteed at a fixed price.

The number of sites available for sale would be far fewer as farmers are more reluctant to sell land, and face tax issues, as opposed to merely renting for a few years having a rental income which can be used annually within the existing business.

Its all pretty obvious I would of thought.......

 

[Exfarmer]

I would have thought that it is obvious
To buy land they need planning first so once this is granted the price will go through the roof
They can negotiate a rent then gain planning and once this granted a lease will be organised
A rent of £1000 on current rate of return is a good deal for the farmer

And no I am not in the least bit interested in ground mount, the return is not good enough

 

[Honest john]

Well I have 30 acres up and running. And would jump at the chance of another 30 acres. Showing 8.5% return on todays land price.
Looking at the condition of many crops this year well enough said.

Having seen the amount of work involved in the build removing it should that time come would be a much bigger job than one may think. 80 staff on site at the peak. 4 truck loads of panels per day.

I see more chance that the panels will be replaced and the site will be producing long after 25 years.

Is Profit out of crops that easy ???

 

[Stoxs]

I have been told that the efficency of these panles reduce over the 25years?
By the time 25 years is up they are next to useless!!
I can see some very irate farmers not getting rent for their field and have the joy of removing hundreds of tonnes of scrap off of it!
Is there a change of use in the planning of these sites? if there is will the change of use be able to be returned after 25 years?

I also am concerned, is the right thing to do.
Should we be giving up food production land for this?
would it not be more suitable to cover every roof first before covering arable ground?

Just dosnt seam right to me regardless of the finacial advantages!!

 

[jumbojimbo]

We have 12 acres of pannels put in just over 2 years ago. The pannels are 5 foot off the ground and we graze sheep underneeth them without any problem. The rents offered vary a lot depending on how far south you live thefore the potential anual return . The rent we get is nearly double some of the figures bounced around on here and is index linked. We still get our sfp, it is still farmed, but now we have a garenteed income for the next 25 years which is a good pension pot for the old man and means he does not nead to try to draw a pension out of the business. Personally i agree the ideal place for pannels is on shed roof but sorry from a business point of view land is there to earn money and if a small area of pannels secures the future then it is a no brainer.

 

[Chickcatcher]

I am of the opinion that some hear are beyond experienced to the point of becoming experts.
Honest John do I understand you right in that your 5 Meg is up and running?, did you do the wind as well?
Exfarmer as well is beyond slightly informed (do you go by the real name of Gary by any chance?)
My Real question to both of you and others is:- Why do most people think that after 25 or how ever many years all the large ground/Wind based
sights will be removed, why not set it up that after the set time period is up the Landowner or tenant owner of the land takes over the ownership of
the site/plant and receives all income from the generating and sale of the Solar/Wind production.

 

[Exfarmer]

There is little evidence that performance of panels will drop drastically over 25 years
Most makers guaranttee 80% after 20 years but even that should be conservative
Though I will agree that the chance most makers will still be around to honour that, is unlikely!
The technology is solid state so there is little to go wrong.
The inverters will need replacing and that has to be factored in.

Ground rents. Have dropped purely as FIT and ROC rates have been slashed

Certainly 2 years ago people were paying £2,000 per acre, sadly that has gone
I do not do ground mount for various reasons nor do I sell panels

I too am concerned about good land being used for this purpose, but do not believe that it will amount to a fraction of the land being used for AD
Although AD will yield a more reliable supply of power the actual real yield of energy from a given area of course is far higher for PV

And the clue to my name is in my signature

 

[Honest john]

I am of the opinion that some hear are beyond experienced to the point of becoming experts.
Honest John do I understand you right in that your 5 Meg is up and running?, did you do the wind as well?
Exfarmer as well is beyond slightly informed (do you go by the real name of Gary by any chance?)
My Real question to both of you and others is:- Why do most people think that after 25 or how ever many years all the large ground/Wind based
sights will be removed, why not set it up that after the set time period is up the Landowner or tenant owner of the land takes over the ownership of
the site/plant and receives all income from the generating and sale of the Solar/Wind production.

Dear Chickcatcher.
Thats a yes on the wind.
I think the councils on these things like to put an end stop in and as the FIT's where for 25 years and the ROC's now 20 years, the planning tended to be for 25 years, also the expected life of a turbine.
I think on our lease there is an option at about year 24 for the tennant to reapply to extend planning. However we could do that ourselfs or be landed with the costs of removing it.Without looking at the lease we did get some help with removal but not enough it was close to a deal breaker at the time. We are NOT abliged to except any offer to extend the lease, at that point in time.
I cant see myself them being returned to cropping,Ii see the planning being extended new and better pannels going in new invertors and a new lease at that time. At year 25 they should be putting out near £200,000 a year based on todays .45p export at year 25 without FIT or ROC.
Who knows what the maths will be in 25 years time. New pannels could be produceing 4 x the power, and export could be much higher.

 

[Honest john]

There is little evidence that performance of panels will drop drastically over 25 years
Most makers guaranttee 80% after 20 years but even that should be conservative
Though I will agree that the chance most makers will still be around to honour that, is unlikely!
The technology is solid state so there is little to go wrong.
The inverters will need replacing and that has to be factored in.

Ground rents. Have dropped purely as FIT and ROC rates have been slashed

Certainly 2 years ago people were paying £2,000 per acre, sadly that has gone
I do not do ground mount for various reasons nor do I sell panels

I too am concerned about good land being used for this purpose, but do not believe that it will amount to a fraction of the land being used for AD
Although AD will yield a more reliable supply of power the actual real yield of energy from a given area of course is far higher for PV
All
Yes and when you have one company looking to grow 14,000 acres of maize it must be a game changer.
2000 acres to grow for 1.5 meg AD. Is that correct ?
or 30 acres for 5 meg PV.
AD what is point of that from a Govenment Point of view ?

 

[Lincsman]

If they owned the land and panels they would have massive disposal cost at the end of its life, renting they can go into liquidation and walk away.