Solar farms - Are we being offered a good deal?

I am sure that many of our members have been approached with regard to installing solar panels on your farm to generate electricity. I have been approached by several companies all are keen on installing a 50Kw site, most are offering the same package which is:-

1. Three phase power must be on the farm within 150m of the

installation

2. You need ’ of an acre of land

3. 25 year lease with the option to buy the installation at ’1 on termination

4. Guarantees that the site will be at least 80% efficient at the time of termination.

5. Lease company responsible for the maintenance of the panels and keeping the vegetation down.

6. All electricity used by yourself during daylight generating period is free to you on the condition that you are generating what you use.

7. The contract is fixed to the RPI so that you will always get more money as inflation increases.

8. All fencing of the enclosure is installed and maintained by them.

This seems like a ’too good to be true’ deal.

The only real benefit to the landowner is the free electricity, but what does the installer get out of the deal?

Well, they sell all of the units back into the grid at 33 pence per unit, they then buy back any electricity that you use at 12 pence per unit (September 2011 prices) So for every unit generated that you use they still make 21 pence per unit, and all the surplus generated they make the whole 33 pence per unit.

Agreeably they have to cover the ’130,000 installation cost and need to recoup their investment. But, 50,000 units @ 33ppu is ’16,500 per year; over 25 years that’s a return of ’412,500. (less your claimable consumption).

My daily consumption on the farm (day units) is 142 units at 12ppu, that’s an annual bill of ’6219, now the installer will tell you that you will get this all for free, that isn’t the case at all, most peak meters run for 17 hours a day and your off peak is 7 hours (hence the economy 7 tariff) throughout the year the system will not have 17 hours generating daylight so you will actually only be gaining about 60% of that saving, that’s ’3,731 a year.

Also bear in mind the efficiency of your installation! My neighbour has a 50Kw site that has been running for over a year, 35% of it has mounting with tilt facility so that you can change the panel angle each month and get a much greater generating capacity; the other 65% is fixed at the standard angle. His site has generated 27% above 50Kw for the last year, that’s an additional 13,500 units @ 33ppu to the installer, a whopping ’4,455 per year on top of their original ’16,500, over the 25 years that’s another ’111,375.

So the installer has the possibility to earn ’523,875 from their ’130,000 installation cost.

SO!! Does it still sound like a ’too good to be true deal’??

There are some other hidden things to bear in mind. The government has committed that in the next 10 years 30% of UK energy will be from green sources. At present they prefer 50Kw sites, but what happens if they don’t meet their targets? In 10 years technology will have evolved significantly and your ’ acre of panels could be switched out for panels that are 10 times as efficient, if this is the case your installer is now generating 10 times as much electricity, but you are still only getting paid for your usage.

Also bear in mind that in this 25 year period you may have changed the business completely and maybe not even have chickens anymore, if this is the case you wont be using anywhere near as much electricity. And what if you invest into energy efficient fans and LED lights?

25 years is a long time to plan ahead for, if the current egg and feed price fiasco continue I am sure many of us will have diversified and moved into another agricultural industry.

Of course if you are fortunate to have ’130k laying around you could put in your own installation and have all the income to yourself.

Bearing in mind all of the above: I have been fortunate enough to be approached by a company local to me, we are in the process of signing up a different deal. I don’t want free electricity because I may not always have this high usage. Instead I want a percentage of the output at the full feed in tariff rate of 33ppu.

I am installing a fully tilt able site with 12 settings. I am happy to maintain the vegetation and be responsible for keeping the panels clean. We are still negotiating percentages, but at the 30% they are offering, that would work out at ’4,950 per year, however, if the site was to run at just 20% above target that’s ’5,940 a year. That’s significantly more than any of the other installers are offering. It also keeps both the installer and landowner closer in touch and makes both parties keen to ensure the site works at optimum efficiency. Clean panels and keeping them un-obscured from the sun is key, as well as having them at the right angle for the time of year.

If in the future the site is allowed to generate more units then I also get to benefit from this.

One of the most successful businesses in our industry is the Bowler group and they are now offering renewable energy deals as well as free-range packages. They are a very efficient streamlined business and wouldn’t be offering installations unless they thought they could get a good return from it.

We are already getting a lousy price for our eggs; lets not get ripped off by the big boys and get a lousy return from our land as well.

We need to ensure that we are getting our fair slice of the cake; after all, they can’t do it without OUR LAND can they?