With the U.K. government apparently preparing to deal another blow to solar by abolishing export payments for small-scale generators, the contribution of the country’s agricultural sector to the industry could be more important than ever.
Britain’s agricultural community plays a critical role in the adoption of solar power, with projects built on farmland accounting for the vast majority of the U.K.’s installed PV capacity.
Based on government figures, the National Farmers’ Union of England and Wales (NFU) – the largest farmers’ organization in both nations – estimates that farmers own or host more than 70% of the U.K.’s 12.8 GW of PV capacity.
The NFU believes 1,250 solar projects with a combined capacity of 8.6 GW are sited on British farms, and it says that a further 18,000 solar rooftops – another 850-900 MW of capacity – are further evidence of the willingness of its members to embrace the business case for solar.
“Regarding agricultural rooftops, we have 55,000 members and roughly a third have solar,” says Jonathan Scurlock, the NFU’s Chief Advisor on Renewables and Climate Change, who dangles a carrot for developers. “That leaves another two thirds [without a solar installation], so the [capacity] figure could at least double as the costs continue to fall.”
And Scurlock goes on to emphasize that farmers are eager to exploit innovations that will help profitability in a sector where margins are being squeezed ever tighter.
“Farmers are also looking at electric vehicles,” he adds. “We know a great number that use Tesla cars and we’re starting to see production of large vehicles from truck manufacturers, which might be used if a farmer has a delivery fleet. We’ve also seen the first prototype electric tractors and other large agricultural machinery, which may be taken up if the technical challenges can be overcome.”
That argument is borne out by farmers who embraced solar because of its economics, at least under the government’s previous renewable obligation certificate (ROC) trading regime, cut sharply two years ago, and the last dregs of which will expire in March.
“When [developer Martifer Solar] first came to me, the thought of covering the fields with solar panels… I thought fields were for growing food, not for electricity generation,” says organic dairy and arable farmer Peter Gantlett. “But when you hear the figures, it makes farming [returns] seem ridiculous.”
Gantlett owns a 400 hectare business between Royal Wootton Bassett and Swindon, in Wiltshire in South West England. He has 150 head of crossbreed dairy cows, keeps the calves for beef, and farms 300 acres (121 hectares) of arable land. Some 46 acres of that estate now host a 9.6 MW solar project developed by Martifer Solar in 2014, with the developer receiving ROC-related income and paying rent to Gantlett.
The farmer estimates that he receives five times as much income from the project as he had from the low-grade grassland previously used for grazing and hay or silage. “Our panels were set up on poor agricultural land,” he adds. “The amount of energy we could create by growing food there is tiny compared to the amount of electricity that can be generated today. People worry about covering productive land but it’s really not the same as concreting over.”
Patrick Twigger, a pig farmer based in Somerset, also in South West England, says he was swayed by a similar business argument when he agreed to let Green Nation install a 46 acre, 10.9 MW solar project at his Monksham Farm, just outside the town of Frome.
“We’ve given up active farming use on that land for 25 years but have a guaranteed rental income which is RPI [retail price index] linked,” says Twigger, who says he is also earning five times more from land previously used to grow food for his pigs, thanks to a rent linked to the retail price index measure of consumer inflation. “This [solar farm] was a business decision we thought long and hard about. It guarantees money coming in and takes some of the uncertainty out of the business.”
It seemed an obvious choice to go for solar, but the process was not quite so straightforward for Peter Gantlett and Patrick Twigger.
“It was like something from a Wallace & Gromit film in the village hall,” says Twigger of the local planning process. “We had a hate mail campaign, a hate website. I had people stick their fingers up to me in the street for ruining ‘their’ countryside. I pointed out ‘I own that bit, that you didn’t want.”
Gantlett, who is involved in a High Court dispute with the owner of the solar project on his farm, says he is concerned about the ownership structure associated with developers, after Portuguese company Martifer Solar was acquired by France’s Voltalia in August 2016.
“The area that needs some light shone on it is the lease arrangements and the financing that goes on behind the scenes,” says the dairy farmer. “That’s something completely alien to farmers and it’s not how we like to do business. There is a [tenant] company which is worth nothing on paper because it’s all debts, but holds the lease and ROCs. That company is then traded and sold on and there’s millions of pounds changing hands and you’re thinking, ‘What’s that got to do with generating electricity?’”
Both farmers negotiated with developers to install projects before the government pulled up the incentive drawbridge, but Gantlett echoes the NFU’s Scurlock when he voices an aspiration to add more PV. The dairy farmer would like rooftop solar to power his 24 hour robotic milking machines “when the finances permit.”
That day probably receded after the announcement by the government’s Department of Business, Energy and Industrial Strategy (BEIS) in July, confirming the long-suspected end of subsidies for solar and a consultation on ending export payments, which would mean small-scale generators feeding surplus energy to the grid for free.
“What’s disappointing about the BEIS announcement is that if the government wants to find some kind of non tariff-based financial incentive for low carbon generation it knows what to do,” says Scurlock. “It could exempt solar from income tax, business rates, investment allowances, et cetera.”
“It’s very disappointing it hasn’t announced this but instead has consulted, asking people to submit these ideas all over again, which will inevitably lead to a hiatus between the end of incentives in March and whatever replaces them.
“This is partly because Brexit is such a distraction, and staff haven’t been able to get on with any rather more sensible policymaking.”
BEIS as usual
The U.K. government’s Department of Business, Energy and Industrial Strategy denies an end to export payments for small-scale generators is a foregone conclusion and a departmental spokesperson tells pv magazine: “We are consulting on whether we continue to support small-scale renewables beyond March 2019. Consultation is the right thing to do and will ensure we have considered all the options before we legislate on any decision to close the scheme.”
Asked whether the timing of the consultation could mean a period with no incentive provision between March and any new regime, the spokesperson says the outcome of the consultation would be published “in due course.”
Asked why the government does not introduce tax incentives for small-scale solar, as suggested by NFU’s Scurlock, the BEIS spokesperson says, “The government already has a robust regime of support for renewable technology and will be investing GBP 2.5 billion ($3.27 billion) to support low carbon innovation in the U.K. between 2015 and 2021.”
Source PV Magazine