|
How solar farms are built and work
In the UK, South of Birmingham a Farmer could rent out land and receive indexed linked payments of £1,000 per acre per year for 25 years before March 2013,
A typical 5MW Renewable Energy Solar Farm to generate electricity would require 30 Acres, the revenue from a 5MW Solar Farm would be £30,000 per year and £750,000 over 25 years.
Detailed Planning issues are covered further in more detail below entitled “Planning Aspects of Solar Parks” however it remains important that to prevent planning objections that any field chosen for a Solar Farm should be isolated from communities, unless a community can support one, not seen from a road or residential properties and near a grid connection not more than 1KM away.
After this time the Farmer owns the technology and full Feed-In-Tariif (FIT) and the panels should continue to produce electricity for another 10 years, 15 years or even 20 years adding much more revenues. A 1.6MW Solar Farm requiring 10 acres would see a revenue of £8,000 per year, £200,000 over a 25 year period. Any Farm having an installation after March 2012 will receive £750 per acre, per year for 25 years.
Does the UK get enough sunlight to make solar work properly?
Germany is the world's largest generator of solar energy. In the summer months, as much as 25% of the country's energy is now being supplied by solar.
Solar electricity is generated by daylight rather than direct sunlight and the intensity of the daylight in the southern part of the UK (from the Midlands south) is much the same as in most of Germany.
An acre of solar farm provides more energy than an acre of ground planted with crops grown for energy, such as oil seed rape.
Size of land required @ £1,000 per acre - indexed linked - average increase per year of 3% (before end of March 2013) there after £750 per acre.
1MW Solar Farm - requires 6 acres of land and index linked payment to the farmer of £6,000 per year for 25 years totalling £218,756
2MW Solar Farm -requires 12 acres of land and index linked payment to the farmer of £12,000 per year for 25 years totalling £437,511
3MW Solar Farm - requires 18 acres of land and index linked payment to the farmer of £18,000 per year for 25 years totalling £656,267
4MW Solar Farm - requires 24 acres of land and index linked payment to the farmer of £24,000 per year for 25 years totallaing £875,022
5MW Solar Farm - requires 30 acres of land and index linked payment to the farmer of £30,000 per year for 25 years totalling £1,093,778
Please review tables below for exact annual payments
Revenues for renting land before April 2013
|
Yr.
|
Inflation (%)
|
1MWp
|
2MWp
|
3MWp
|
4MWp
|
5MWp
|
|
|
1
|
3
|
£6,000
|
£12,000
|
£18,000
|
£24,000
|
£30,000
|
|
|
2
|
3
|
£6,180
|
£12,360
|
£18,540
|
£24,720
|
£30,900
|
|
|
3
|
3
|
£6,365
|
£12,731
|
£19,096
|
£25,462
|
£31,827
|
|
|
4
|
3
|
£6,556
|
£13,113
|
£19,669
|
£26,225
|
£32,782
|
|
|
5
|
3
|
£6,753
|
£13,506
|
£20,259
|
£27,012
|
£33,765
|
|
|
6
|
3
|
£6,956
|
£13,911
|
£20,867
|
£27,823
|
£34,778
|
|
|
7
|
3
|
£7,164
|
£14,329
|
£21,493
|
£28,657
|
£35,822
|
|
|
8
|
3
|
£7,379
|
£14,758
|
£22,138
|
£29,517
|
£36,896
|
|
|
9
|
3
|
£7,601
|
£15,201
|
£22,802
|
£30,402
|
£38,003
|
|
|
10
|
3
|
£7,829
|
£15,657
|
£23,486
|
£31,315
|
£39,143
|
|
|
11
|
3
|
£8,063
|
£16,127
|
£24,190
|
£32,254
|
£40,317
|
|
|
12
|
3
|
£8,305
|
£16,611
|
£24,916
|
£33,222
|
£41,527
|
|
|
13
|
3
|
£8,555
|
£17,109
|
£25,664
|
£34,218
|
£42,773
|
|
|
14
|
3
|
£8,811
|
£17,622
|
£26,434
|
£35,245
|
£44,056
|
|
|
15
|
3
|
£9,076
|
£18,151
|
£27,227
|
£36,302
|
£45,378
|
|
|
16
|
3
|
£9,348
|
£18,696
|
£28,043
|
£37,391
|
£46,739
|
|
|
17
|
3
|
£9,628
|
£19,256
|
£28,885
|
£38,513
|
£48,141
|
|
|
18
|
3
|
£9,917
|
£19,834
|
£29,751
|
£39,668
|
£49,585
|
|
|
19
|
3
|
£10,215
|
£20,429
|
£30,644
|
£40,858
|
£51,073
|
|
|
20
|
3
|
£10,521
|
£21,042
|
£31,563
|
£42,084
|
£52,605
|
|
|
21
|
3
|
£10,837
|
£21,673
|
£32,510
|
£43,347
|
£54,183
|
|
|
22
|
3
|
£11,162
|
£22,324
|
£33,485
|
£44,647
|
£55,809
|
|
|
23
|
3
|
£11,497
|
£22,993
|
£34,490
|
£45,986
|
£57,483
|
|
|
24
|
3
|
£11,842
|
£23,683
|
£35,525
|
£47,366
|
£59,208
|
|
|
25
|
3
|
£12,197
|
£24,394
|
£36,590
|
£48,787
|
£60,984
|
|
|
Total
|
|
£218,756
|
£437,511
|
£656,267
|
£875,022
|
£1,093,778
|
|
|
Revenues for renting land after April 2013
|
Yr.
|
Inflation (%)
|
1MWp
|
2MWp
|
3MWp
|
4MWp
|
5MWp
|
|
|
1
|
3
|
£4,500
|
£9,000
|
£13,500
|
£18,000
|
£22,500
|
|
|
2
|
3
|
£4,635
|
£9,270
|
£13,905
|
£18,540
|
£23,175
|
|
|
3
|
3
|
£4,774
|
£9,548
|
£14,322
|
£19,096
|
£23,870
|
|
|
4
|
3
|
£4,917
|
£9,835
|
£14,752
|
£19,669
|
£24,586
|
|
|
5
|
3
|
£5,065
|
£10,130
|
£15,194
|
£20,259
|
£25,324
|
|
|
6
|
3
|
£5,217
|
£10,433
|
£15,650
|
£20,867
|
£26,084
|
|
|
7
|
3
|
£5,373
|
£10,746
|
£16,120
|
£21,493
|
£26,866
|
|
|
8
|
3
|
£5,534
|
£11,069
|
£16,603
|
£22,138
|
£27,672
|
|
|
9
|
3
|
£5,700
|
£11,401
|
£17,101
|
£22,802
|
£28,502
|
|
|
10
|
3
|
£5,871
|
£11,743
|
£17,614
|
£23,486
|
£29,357
|
|
|
11
|
3
|
£6,048
|
£12,095
|
£18,143
|
£24,190
|
£30,238
|
|
|
12
|
3
|
£6,229
|
£12,458
|
£18,687
|
£24,916
|
£31,145
|
|
|
13
|
3
|
£6,416
|
£12,832
|
£19,248
|
£25,664
|
£32,080
|
|
|
14
|
3
|
£6,608
|
£13,217
|
£19,825
|
£26,434
|
£33,042
|
|
|
15
|
3
|
£6,807
|
£13,613
|
£20,420
|
£27,227
|
£34,033
|
|
|
16
|
3
|
£7,011
|
£14,022
|
£21,033
|
£28,043
|
£35,054
|
|
|
17
|
3
|
£7,221
|
£14,442
|
£21,664
|
£28,885
|
£36,106
|
|
|
18
|
3
|
£7,438
|
£14,876
|
£22,313
|
£29,751
|
£37,189
|
|
|
19
|
3
|
£7,661
|
£15,322
|
£22,983
|
£30,644
|
£38,305
|
|
|
20
|
3
|
£7,891
|
£15,782
|
£23,672
|
£31,563
|
£39,454
|
|
|
21
|
3
|
£8,128
|
£16,255
|
£24,383
|
£32,510
|
£40,638
|
|
|
22
|
3
|
£8,371
|
£16,743
|
£25,114
|
£33,485
|
£41,857
|
|
|
23
|
3
|
£8,622
|
£17,245
|
£25,867
|
£34,490
|
£43,112
|
|
|
24
|
3
|
£8,881
|
£17,762
|
£26,643
|
£35,525
|
£44,406
|
|
|
25
|
3
|
£9,148
|
£18,295
|
£27,443
|
£36,590
|
£45,738
|
|
|
Total
|
|
£164,067
|
£328,133
|
£492,200
|
£656,267
|
£820,333
|
|
Payments to Farmers: - this will vary depending on the funder of the Solar Farm.
In most circumstances the farmer would receive the land rental at the end of the first year and then every 12 months from that point onwards. Alternatively some funds do pay land rentals quarterly in 4 equal payments.
RPI is running at an average of 3.56% over the past 25 years, so each year payments will increase by about this 3.56%, for the purposes of calculating revenues the RPI will be taken as 3% for the first 10 years, there after 5%.
A Solar Farm would change the use of land from agricultural to industrial and payments for set aside may stop, please check with your scheme provider as any stoppage of payment depends on the type of set aside.
For example I know the Country side stewardship scheme would be voided and a penalty fee paid. Having said this a bonus can be paid to the farmer once planning is received for the PV farm so that this cost can be covered.
However to be sure on each case the farmer should enquire with the relevant scheme representative to be sure.
Hill sides are not a problem install wise. However a south facing slope is desired. There will be shading issues, even if the panels are pointed South on a north slope.
When the Solar Array is handed over the farmer will not need to build out the system as it will already be in place. However current build costs are in the region of £1.1m per MWp or £5.5m for a 5MWp.
After the 20-25 year period there will be no FIT or ROC payments available. However the income from exporting the power will still exist.
After 20 years the system should still be outputting 3.65m kWhs. Currently a solar farm receives about 5p for each kWh sent into the grid, obviously in the future these rates will be more. Assuming todays rates stand, a 5MWp farm will still generate (3,650,000 x £0.05) £182,500 per annum in export revenue.
It is worth noting that the farmer may need to get the system through planning again, however there should be no complication as it will have already been in place for 20 – 25 years.
If at the end of the 25 years the Farmer wished his land returned to agricultural use, we do the remedial work, remove the solar technology if asked to do so and return land back to original land use state?.
Planning
Ideal sites are fields away from roads (but still with access), can’t be seen from any buildings and are in areas with no/little other planning applications for solar farms.
The considerations for planning are that the land can’t be seen from any roads or properties.The issues with planning come about when local residents can see the site and may likely object.
Offer to Residents in a proposed Solar Farm area - free electricity from their own Solar PV panels
The offer to local residents will be a Self-Funding Energy Savings & Resource Ownership Loan that pays for itself to be able to install Solar PV on their own properties enabling them to receive renewable energy supply, receive export tariff revenue and also the Feed-In-Tariff (FIT), which can amount to savings and revenues of over a 20 year FIT period.
Under the old 43 pence Feed-In-Tariff the following table indicates profit and payback for a 4KW home system

Under the new FIT scehem of 20 years the normal Solar PV Installation costs = £4,599
Estimated Energy Savings and revenues from a 2 KW Solar PV system.
|
Electricity Generated
|
1802 kW
|
|
Generation Tariff
|
£277.50
|
|
Export Tariff
|
£41
|
|
Electricity Bill Saving
|
£126
|
|
Total Income and Savings (yearly)
|
£444.50
|
|
20 Year income and Saving
|
£8890
|
|