With the introduction of generous guaranteed Feed-in Tariffs for renewable electricity production in April, there has been a surge in interest for all different types of renewable energy projects. The new prospect that will be of interest to farmers is the opportunity to let land to solar park developers. Secure in the knowledge that the Feed-in Tariff is paid by the electricity companies, so safe from Government cuts, there are a number of companies scouring the South West for 25 to 30 acre blocks of flat or south facing land.
Thomas Ireland of Carter Jonas’ Wells office is already advising a number of farmers on the promotion of their land and helping them negotiate the best deal possible. The Solar Park developers are willing to pay rents of £1,000 to £2,000 per acre per annum for the land that they need, which is significantly more profitable for farmers than growing corn. A rent of £40,000 per annum is also a good retirement fund or helpful diversification to underpin a farmer’s agricultural business.
In terms of electricity generation, the Solar Parks will normally have a capacity of 5MW and are likely to generate approximately five million kWh of electricity. In layman terms, this is enough to power 1500 average sized houses.
As described above, the developers are after 25 acre sites that are flat or south facing, not designated for their wildlife or landscape, have reasonable access, do not immediately adjoin residential areas and benefit from a National Grid connection near by. The reason for developers rushing around to sign up sites as soon as possible is that the Feed-in tariff rate of 29.3p per kWh drops to 26.8p per kWh in April 2012. There is also a race on for the prestige of being the first developer to switch on a solar park in the UK.
In a new boom market such as this there are inevitably a lot of new firms popping up, who claim to be solar park developers but have little knowledge of the sector and even less true financial backing. It is therefore well worth taking independent expert advice from a firm such as Carter Jonas as early as possible in the process and certainly before you sign any form of agreement.
For more information please contact Thomas Ireland.