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🇬🇧 Is the sun shining on solar: are solar panels an answer to farm diversification?

Sheep grazing by solar panels

How can solar panels fit with today’s farming?

With the UK determined to strive for net zero in the coming years, solar power has been a significant part of the debate. Currently, ground-mounted solar panels cover just 0.1% of the land in the UK. However, politicians have been outspoken about the damage they could cause to high-quality productive farmland. They claim that replacing farmland with fields of solar panels would not only be an eye-sore, but it would impact on our food security. However, golf courses take up significantly more space at 0.5% of our total land and there are ways to tap into both food production and solar energy on the same area.

Using solar panels in combination with traditional farming is called agrivoltaics. You can erect solar panels in fields that already graze livestock. Cattle and sheep can graze below and in between the panels. They can be positioned in fields that are used as pollinator habitat such as wildflower meadows and they can be spaced far enough apart that machinery can drive in between the rows to harvest crops. Japan is the world leader in agrivoltaics and farmers across the country grow more than 120 different crops below the panels.

Sheep grazing around panels in France
Sheep grazing around solar panels on a farm in Spain.

What are the benefits to agrivoltaics?

With the pressures of climate change and unpredictable weather conditions, solar production can provide a regular income for farmers. Where crops may fail due to adverse weather or prices may fluctuate, solar panels could help maintain a steady revenue stream. It can also secure a future without subsidies. On average, solar energy can produce £900 per acre per year. In comparison, grazing land can produce £186, dairy farming £246, and arable £366 per acre including subsidies.

Some farmers in other parts of the world have noticed increased production in fields where there are solar panels. They provide shade for grazing grasses and increase water retention which help pastures to grow better. A study in the US found an increase in biomass by 90% where grass grows amongst solar panels.

Panels also provide shelter for livestock. The wool from Merino sheep in Australia improved in both quantity and quality during a four-year grazing trial amongst solar panels. This was both due to the shelter provided for the sheep and the higher quality pasture.

What are some of the things to consider when looking at solar farm schemes?

Solar farms need space with an ideal site between 25 and 200 acres. You need between 6 and 8 acres of land to produce 1 megawatt of energy. It takes months to set up a solar farm and even once the panels are installed, it can take between 1 and 3 years before they are fully operational, sometimes longer. They shouldn’t be near residential property or on a valued landscape. The land should ideally be flat, of medium to poor quality (Grades 3 or higher), and within 1 mile of overhead electricity cables or an electricity substation.

As well as restrictions on the location, there are up-front costs to installing a solar farm. Around 4,000 solar panels can fit on one acre of land. These would cost £3 million to buy and install if you purchased them, rather than went through a management company. They also need to be connected to the grid so that you can sell the electricity generated. Costs of this connection could be high.

You also need to use approved solar panels. Renewable technology is rigorously tested in the UK. The supplier must be registered with Microgeneration Certification Scheme (MCS) to ensure safety and quality standards. Installers should be members of Renewable Energy Consumer Code (RECC).

If you are planning on grazing livestock in the same field as the solar panels, then they can be a great way of maintaining the grassland below the panels. However, you may need to make some changes on how you manage stock.

Case Study

Stephen and Clare Morgan from Haverfordwest have developed 183 acres of their land into a solar farm. They found that their Welsh Mule sheep, sired to a Texel, were too big to fit underneath the panels. Therefore, they changed to a smaller breed.

The Morgan’s solar park is stocked with 12 sheep/ha reduced to 5/ha over the winter. They opted for Aberfield ewes due to their smaller size and less dependency. It can be challenging to bring the sheep in from the field as they are often between the panels and can risk injury when rounded up by the dogs. Therefore, sheep that are more hardy and require fewer regular checks are better suited.

The couple have found it difficult to reseed the land and the shade from the panels reduces the sugar content of the sward. Over time, the grass will become nutritionally poorer requiring fertiliser and weed control, which counters findings from elsewhere in the world.

What are the challenges you may face setting up a solar farm?

All sites will require planning permission in the UK. The local authority will consider not only the location, but also the quality of the land in question. There are 3 types of solar developer that can help you to establish a solar farm.

Site finders will apply for planning permission for you and offer you the terms of the agreement before selling the project on to a developer. A financially-backed developer will build the project and then sell it on. A funded developer will take over the planning, construction and running of the site over the long term.

Regardless, it doesn’t make sense to sign an exclusivity agreement until all terms and conditions are agreed. The contract should clearly state what happens to the site at the end of the agreement. Most developers look to secure agreements of 30 years or more. Typically, solar farms last for 40 years but who is going to deconstruct them or replace them at the end of this period? There may be considerations when it comes to the impact on your land, accessibility during construction, and conditions of the developer’s indemnity insurance. All of this should be laid out in the terms of the agreement.

Tax considerations for solar farms

Something that has put many landowners off when thinking about diversifying into solar energy is tax. HMRC considers renting land out for solar power commercial use rather than agricultural. This means that you cannot claim Agricultural Property Relief from inheritance tax. Furthermore, rental income is liable to income or cooperation tax. However, there could be ways to minimise this through transferring ownership of the land to another individual before installation. Also, if the solar farm only forms part of your overall land use, then you may be eligible for Business Property Relief from inheritance tax. It is best to seek professional financial advice to ensure you are aware of all the financial costs and benefits of diversifying into solar energy.

More information can be found at the Parliament website.

So are solar farms worth it?

Ultimately, it has to be weighed up, considering your land quality, other forms of income opportunity and whether the rules, regulations and agreement from developers work for you. You should also consult with an advisor about the best livestock to manage around the solar panels and how best to manage the soil. Read ore about how the Japanese agrivoltaics industry works here and also here.

To read more blogs by AgriWebb, click here.

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