Solar Panels for Agricultural Buildings

Mypower has a proven track record of providing energy solutions in the agricultural sector which deliver real benefits and savings.

Solar power

Rising costs of electricity are adding to the escalating overheads faced by UK farmers and effect profitability. Farm buildings can provide large, uncomplicated roof space which are ideal for a PV installation which can help farmers significantly reduced their energy bills. Mypower specialise in solar panels for agricultural buildings, installing quality high-yielding solar panels.

High Energy Users

Refrigeration warehouses, grain stores, dairy units, chicken housing, etc require a lot of energy to operate. They also provide excellent opportunities for agricultural solar panels to help reduce electricity costs. Matching the daytime generation from the panels to the electricity demand within the building is the most efficient way to use solar energy as it means that the business needs to import less energy from the grid which costs twice as much as solar.  At current installation costs solar PV is seeing an ROI of 11-16% - considerably more than any UK bank is offering! Average payback length is 6-9 years and your solar investment can be cashflow positive in as little as 2 years. With low interest rates solar is therefore viewed as a low risk investment particularly for a long term businesses such those in the agricultural sector.

Lye Cross Farm, refrigerates 3000 tonnes of cheese and in doing so uses 600,000 units of energy per annum. Mypower installed a 172kw roof top solar panel system and now the farm are saving nearly £16,000 per year plus FIT payments. Read our Lye Cross case study in full.

FiT Payments

Although the Feed in Tariff has been reduced you can still get around 4.3p per unit of energy generated from the government subsidy and its set at this rate for the next 20 years and linked to inflation. A 50kw agricultural solar installation using 75% of the generation on site, can expect a projected first year income and savings in excess of £7,250, giving a first year return on capital of 14.5% before indexation. Any unused energy can be sold back to the National grid.

What’s the future of solar panels for agricultural buildings?

Despite FiT reductions, solar...

• Reduces costs from energy suppliers
• Remains profitable
• Adds value to your business/farm
• Reduces carbon footprint
• Can be bought at a fixed cost of 5p per unit

 

Solar is an excellent low risk technology as:

• It is no longer new and is tried and tested
• Average yields are very predictable
• Panels and inverters have long robust warranties
• FiT is government backed for 20 years, increasing with RPI
• Maintenance is minimal - no moving parts

Solar panels remain a compelling investment for the agriculture business sector. Even before FIT payments are added, companies can forward buy their electricity at around 5 pence per unit, about half the price quoted by the major suppliers.

Impact of fitting solar now in 2016…

In 2012 Farmer Andrew Bullock had 198 panels and has no regrets about having installed solar on his farm. “We are both saving and making money. Anyone who has significant daytime energy use will make solar pay”, Mr Bullock.

Take a look at the table below, we compare Andrew Bullock’s 2012 solar installation to how it would look if he installed the same system in 2016.

	2012	2016
Size	50kw	50kw
Number of panels	200xREC 250w	200xREC 250w
Electricity produced year 1	47,665 units (kwh)	47,665 units (kwh)
Supply and installation costs	£69,500	£51,000
FiT subsidy	13.5p/unit (kwh)	4.59p/unit (kwh)
Income and savings	£9,500 year 1	£6,200 year 1
Year 1 return on investment	13.7%	12.1%
Payback	7.3 years	8.2 years

Despite subsidy drop, payback is less than a year longer and ROI still exceeds 12%. This is because increases in electricity prices means increases in savings and more money for the surplus electricity sold to the grid, offsetting subsidy reductions. The installation price has dropped with cost-effective automated production.

Tax benefits with solar

Solar panels are classed as plant and machinery which means they are eligible for capital allowances. So the capital cost can be written off against profits in the first year.

If we take a farming partnership paying 40% tax as an example, its possible to claim back from HMRC 40% of the cost of the solar installation in the next tax returns. This means a £50,000 investment effectively costs the business just £30,000 making the first year return on investment significantly higher at around 24%  and the cost of producing each unit of electricity considerably lower at around 2 to 3p / unit.

Interested or would like more information?

Mypower is highly experienced in supplying agricultural building solar panels. If you would like more informational along with the facts and the figures on how you can benefit from solar please get in touch on 01242 620894 or visit our contact page.