we are currently advising landowners and farmers on a range of roof and ground mounted solar photovoltaic (PV) projects.

Solar PV is renewable energy’s fastest growing sector and prices have fallen two and half times since the introduction of the Feed in Tariffs. Interest in solar PV has therefore rocketed, presenting a further diversification opportunity for landowners and farmers.

Intervention from DECC has reduced the tariffs but this has been offset by large reductions in capital costs and therefore very attractive returns are still available in what is a long term investment of 20 years. For a well sited solar PV system with an onsite electricity demand, solar PV deployment is an excellent investment and a hedge against future electricity price rises. The equipment will last beyond the 20 year life of the tariff and continue to produce electricity.

Solar PV is a relatively simple technology to install, fund, maintain and operate provided you have:

the system designed appropriately
chosen the right technology using Tier 1 equipment
gained planning permission for ground mounted solar PV
a viable connection to the grid (or energy storage solution)
a 3-phase connection for systems larger than 10kW (approximate)
someone contracted to buy the unused electricity (with FITs you have export already guaranteed if you install an export meter)
completed all of the above and completed the right paperwork to allow support under FIT or RHI

The tariffs are linked to the RPI , offering a long term and secure income stream. There is, however, a three monthly ‘degression’ rate applicable to the FITs and so often it is a race against the clock to commission solar projects in time.

Large scale field mounted solar PV development disappeared when the FIT was reduced by 75% in August 2011, yet a year later this market returned and is currently booming as the price of solar panels have come down by 250%. This presents a unique opportunity for farmers and landowners with land suitable for a solar park if it is within up to 6km (for larger sites) of an appropriate electrical grid infrastructure.

Commercial scale solar PV is viable under the Renewables Obligation (RO); solar PV is currently eligible for 1.4 ROCS per MWh (at least until 1 April 2015).

From the 1 April 2015 a new subsidy scheme called Contracts for Differences (CfDs) is being introduced for any solar parks commissioned after that date and over 5MW (25-30 acres) in size. This has added great uncertainty to the viability of projects of this scale (over 5MW). It looks likely that solar park developers will look to develop sites up to 5MW in order to carry on benefitting from the ROC subsidy, or develop much larger sites under CfDs.

Landowners will be offered rentals around £800-£1,000 per acre pa RPI linked for at least 25 years or the higher of a % of gross income. The rent will be a reflection of the irradiation of the site, the scale of it and the connection costs.

Landowners with available and appropriate land should seek specialist surveyors’ advice for any Option and Lease agreement advice because they will be entering into a 25 to 30 year relationship and so it is important that the agreement is right! Do not sign an exclusivity agreement or a grid connection without talking to us first; otherwise you will be tied into that solar company and we need to ensure you are with the right developer offering the best terms.

Our renewables team have experience and knowledge of negotiating these contracts, having negotiated over 50 solar parks throughout the country.

Another option that a lot of farmers are not aware off is that if you currently get the grid connection and the planning approval, under the current 1.4ROC regime your project has a capital value for a 10MW solar park of in excess of £1million. This could be a very attractive option because in addition you will continue to receive the rent of £800-1,000 per acre per annum for the lease term!

We have 10 specialist renewable energy planners who can get the planning approval for you and we can also organise for the grid application to be made. What we do not yet know is what the capital value will be for projects after 1 April 2015 when solar parks over 5MW go under the Contract for Differences scheme.

Fisher German are well positioned to offer some of the best professional advice on solar park deployment and help the development of your project. The developer will normally make a contribution or pay our surveyors` costs for advising you.

We can help with:

Assessing opportunities on your land
Site promotion to bone fide developers
Recommendation of our approved installers
Financial forecasting
Project management
Planning advice
Due diligence and valuation work
Negotiating heads of terms for solar parks

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