Energy & Marine overview

Solar Park Opportunities

There are a large number of companies scouring the UK for potential development sites offering to pay rents of £1,000 to £2,000 per acre per annum for 25 years, subject to planning consent and commissioning of a successful project. This often represents a good potential income stream when compared to the existing land use and a contribution is normally made towards a site owner’s professional fees.

However, there is the possibility for a site owner to pursue a ground mounted development independently and achieve significantly greater financial benefit should they be willing to take on the planning risk.

Carter Jonas is advising on a number of schemes assisting with feasibility, planning, investment appraisal and project management.

Rather than taking a fixed rent, site owners stand to reap either an additional capital sum, estimated to be six figures per megawatt of capacity upon consent, or should they choose to develop the scheme themselves, they could receive an inflation proof return of 10-12% before tax and finance costs for 25 years. Planning risk costs are estimated to be around £50,000 depending on site characteristics and constraints, though much of this risk can be mitigated prior to making an application through consultations with key stakeholders and careful site selection.

As the cost of equipment has reduced recently, sites further north with lower levels of solar irradiance have become more attractive from a financial perspective. Due to a lack of planning case law in this new area it is difficult to identify absolute planning constraints, but the following characteristics represent a favourable site:
• 20-40 acres of land (around 7 acres per megawatt)
• the further south in the country the better the solar irradiance, and therefore return
• flat or south facing
• free of statutory designations for ecology and landscape (eg SSSI or AONB)
• reasonable access for construction vehicles
• a reasonable distance from third party residential areas
• well hidden from public view by natural screening
• within 500m of a potential National Grid connection (11kv-33kv line or 33kv substation)
• there is also the perception that a site on lower grade or brownfield land will be looked upon more positively by planning authorities

Time is of the essence as the FiT rate of 29.3p per kWh for installations larger than 100kWp in capacity drops to 26.8p per kWh for installations commissioned after April 2012. There is also growing speculation, fuelled by the Energy Minister, that the DECC may act to limit the delivery of commercial scale PV systems in the medium term but, at present, tariff levels remain fixed.

In a boom market such as this, there are inevitably a large number of new entrants appearing, some of whom are sound operators and others who have little knowledge of the development process and little financial backing. It is therefore well worth taking independent expert advice as early as possible in the development process, and certainly before signing any form of agreement.

If you have a site you feel may have some potential and would like to discuss your options please contact a member of the Energy Team.

Thomas IrelandMRICS

Associate

Thomas is based in Wells in the south west of England and advises clients throughout the area on rural estate management, valuation and general professional matters. He specialises in renewable energy...

01749 683386

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