Are Solar Panels a Worthwhile Investment for Farms?
An increasing number of farms are installing solar panel systems on their land. Agricultural businesses typically have huge success with solar panel projects, so it’s easy to see why so many farm owners are taking an interest in solar power.
If you’re considering whether a solar panel installation could benefit your farm, then here is everything you need to know about solar panels for agricultural buildings.
What are the benefits of installing solar panels on my farm?
One of the biggest advantages of installing PV solar panels on your farm is reducing your electricity bills. Depending on your level and profile of electricity consumption, a solar PV system will reduce the amount of expensive electricity you need to purchase from the grid. Any excess generation can be sold to the grid, providing an income.
Selling crops is no longer financially viable for many farmers because of issues affecting crop yield and consumer demand. Solar panels can provide an alternative source of income and boost your annual farming profits
Solar energy is one of the cleanest sources of energy, and it's an extremely effective way to make your agricultural business more efficient and sustainable. Unlike traditional fossil fuels, solar electricity does not produce any greenhouse gases or contribute to global warming.
According to GreenMatch, “the average solar farm has the potential to power approximately 1,500 homes for a year.” Agricultural solar panels will help farms and other businesses with high energy consumption reduce carbon emissions and meet their green targets.
Agricultural solar systems require very little maintenance once they have been installed. The panels have no moving parts, and usually come with 25-year performance warranties that outline that the panels are expected to generate at least 85% of their Year 1 output at the 25-year point. The inverters that convert the generated electricity from DC to AC current and synchronise with the grid typically come with 10 year warranties, and are easy to access and relatively inexpensive to replace. The requirement and schedule for solar panel cleaning is very dependent on the environment the system is installed in. Consideration for cleaning and roof level ongoing maintenance at design stage can make any future maintenance requirements straightforward.
Are solar panels suitable for small-scale farms?
Solar panels are a good investment for most types of farms and agricultural businesses, but you need to make sure that your site is suitable for commercial solar installation. Firstly, you must check that you have a suitable power supply nearby e.g. a distribution line or substation.
You must then decide where the solar system will be located. You can either have solar panels installed on the roof of your agricultural business or at ground level. For rooftop installations, planning permission can fall under your permitted development rights, but typically for larger commercial systems falls into the Prior Notice planning category. For the largest systems or where there are special conditions e.g. AONB a full planning application is normally required.
You will need to apply for planning permission if you are installing commercial solar panels at ground level and they are larger than 9m sq or more than 4 meters high.
Is it still worth installing solar panels on my farm without the Feed-in Tariff
The Government scrapped the Feed-in Tariff (FiT) scheme in April 2019, meaning that there is no subsidy payment applied to every unit of electricity that you generate, whether you use it onsite or not.
Despite this, solar panels are still a worthwhile investment for farms due to rise in grid supplied electricity costs and the falling cost of solar panel. Solar panels systems have become 82% cheaper in the past decade, so now is an ideal time to invest in solar energy.
How quickly will I see a return on investment?
The return on investment (ROI) of commercial solar panels depends on several factors such as the amount of the generated electricity you use on your farm.
A large solar panel project will have a high initial setup cost, but it can provide substantial profit long-term. The payback time for most solar panel installations is between 5 and 8 years and the ROI is between 14% and 16%. This means your farm should recoup the initial installation fees quickly and then enjoy significant profit from your solar panels.
Solar panels offer several benefits to farms and agricultural businesses. Installing a solar panel system could add value to your business, reduce operating costs and provide you with a secure and consistent secondary income.
That said, whether solar panels are a worthwhile investment for your farm will depend on your current situation, your site, and the profits that you can make with your farm.
Get in touch with our expert team if you would like to discuss whether solar panels could be the ideal solution for your farm or agricultural business.