You may be aware that there are two types of solar panels: solar PV (photovoltaic
Farms have always been a good place for solar panels. With large roofed agricultural buildings or spare land, it can be easy to build large, productive solar panel systems on farms.
As well as the build being easy, the energy demands of farms also usually match well with solar electricity, particularly where daytime energy use is high.
Now is also a good time to invest in solar energy. Energy prices are higher than they’ve ever been, and it looks like high prices will stay.
Farmers can benefit from solar energy now more than ever before:
Solar panels used to be an experimental technology, but they’re now well-established. The good track record that solar panels have, along with the promise of high future energy costs, makes solar energy a better investment now than ever.
With solar panels, farmers can save a great deal of money for their business on energy costs.
The exact amount that people can save will vary from business to business, and it’s best to seek advice before you invest in solar panels. However, many people are reporting pay off periods of less than 10 years for solar panel investments on farms. With solar panel systems typically coming with a 25 year warranty, this means you should benefit from at least 15 years of free electricity production with solar panels.
For an impartial look at rates of return on solar panels, you can look at the NFU website.
A solar battery could be useful for more than just dealing with the problem of excess solar panel energy production.
You might also be able to use a solar battery to store energy from the National Grid when prices are lowest. If you’re charged more for electricity at peak times, then installing a solar battery could mean that you’re able to store grid energy when it’s cheapest. In fact, solar batteries are sometimes installed by people who don’t even have solar panels.
As well as this, it may even be possible to get paid by energy companies to store electricity when the National Grid produces too much. Energy companies have the same problem as solar panel owners, and at certain times they produce excess energy. With a battery it may be possible to get paid by energy suppliers to store excess electricity from the grid at these times.
Please note that you may need permission before you can install a battery that takes electricity from the grid.
Solar panels are an investment, and it always pays to weigh things up before you make a decision. As we said, a good first step is to seek advice from a professional, who’ll be able to make a good estimate on how much you could save based on:
Outside of seeking advice from a solar panel expert, another good place to go is the Energy Saving Trust’s website, which you can view here.
While you may have to invest a significant amount of money in solar panels in the first place, you could save yourself a lot of money in the long run.
Solar panels generate free electricity from the sun that could power your business. Once you’ve saved enough on your energy bills to pay off the initial investment, you’ll be generating free electricity that you can use instead of grid energy. Over the lifetime of your solar panels, this could save you a considerable amount of money.
It’s not easy to say exactly how much a farm could save with solar panels, because it varies so much from farm to farm. It is possible, though, to give a typical example…..
This is based on an annual rate of return of 13%, as is often reported by farmers and other businesses in the UK which have installed solar panels. Please note that savings vary and could be higher or lower than this.
With rates of return around 13%, solar panels are a good investment.
Unfortunately, both the Feed-in Tariff and the Renewables Obligation have closed, and farms are no longer eligible for these. These were both schemes which added profitability to solar panel systems for UK farmers. In spite of this, solar panels are actually a more attractive investment now than they were when these schemes were in place.
The reason for this is that solar panels have reduced significantly in price, while energy prices have risen in price. Solar panels are simply a good investment nowadays because the cost of investment is lower and the returns are higher. The Feed-in Tariff and the Renewables Obligation schemes were both operated to encourage uptake of solar panels at a time when solar panels made less economical sense.
Nowadays, solar panels are a good investment by themselves, and you don’t need government support.
You can claim solar panels against your capital allowances because they’re classed as plant and machinery. With the annual investment allowance you may be able to offset up to £100,000 of investment in solar panels in tax.
You may be able to fund your solar panel installation project through:
While some farms are going into business generating renewable energy, most farmers will not benefit a huge amount from selling electricity to the grid.
If your solar farm produces electricity that you don’t use yourself, then it will be exported to the grid, and you should be paid for this under the Smart Export Guarantee. However, you won’t actually receive a great deal of money. In fact, it costs considerably more money to buy energy from the grid than you get from selling energy to the grid.
The upshot of this is that it makes sense to use as much of the energy you produce as possible, yourself. Overall, this is where you will save more money.
One common problem with solar panels is that you need to be able to maximise daytime use of electricity. Solar panels produce energy during the day, and the more of the energy you use directly from your solar panels, the better. As such, solar panels will usually work best on farms that either already use the bulk of their electricity during the day or can switch to doing so.
Where it’s not possible to maximise daytime energy use, it may be possible for farms to install battery support with their solar panel system. With batteries, excess energy that’s produced during the day is simply stored for when it’s needed later. There is, however, a financial cost to installing batteries with a solar panel system.
This is a common question. The answer, luckily, is that there is very little maintenance required with solar panels. In fact, most solar systems only need occasional cleaning and monitoring during their entire lifetime. Solar panels should be very reliable once you’ve had them installed.
As we said earlier, solar panel systems typically come with a warranty period of 25 years.
In actual fact, the typical lifespan of a solar panel is over 25 years.
While solar panels do slowly degrade over time and produce a decreasing amount of energy, the rate of degradation is actually very slow. Normally, it’s about 0.8% per year. At this rate, you would still have an 80% output even after 25 years. For more information on solar panel lifespans, you can read this article here.
Solar panels will not work on every farm, although they will work on most.
As we mentioned earlier, one of the most helpful things is if you’re able to maximise daytime electricity use on your farm. The more electricity you can use directly from your solar panels while they’re producing it during the day, the better. This will ensure that you save as much money as possible and will likely make solar panels a good investment.
Where it’s not possible to completely optimise your use of electricity to suit solar panels, this doesn’t necessarily mean they’ll be a bad investment. You may just need to change your approach. Solar batteries or an otherwise altered system design could help. Speaking to an expert is also a good idea.
Here are some things to think about when it comes to actually siting a solar panel system on your farm.
Most solar panel systems are roof mounted, sitting on top of a building. With agricultural buildings usually having roofs with a very large surface area, they’re often ideally suited.
Most modern roofs will be well suited to solar panels, and your installer should be able to attach solar panels without a huge amount of difficulty or without incurring additional costs. If, however, a roof is structurally unsound or made of asbestos, this may be a problem:
In both situations, you’ll probably need to replace the roof at the same time as you fit your solar panel system. One upside of this is that you will effectively be able to use your solar panels to pay for your new roof, with the savings you make from your solar panels funding your new roof.
Ground based systems are possible and can be used as an alternative to roof systems. The only thing to note is that you will need to have spare land on which to build.
For reference, a 40 kW solar system will typically need around 275 square metres of space.
To make the most of the sun, it helps if you’re in a good location and facing the right direction. Don’t write solar off, though, if you live in Scotland or the North. The difference is actually small.
If you want to install solar panels on the roof of an agricultural building, it’s best if you can position them so they’re south, east or west facing. South is best, but east and west are okay. Normally, north facing roofs are not recommended for solar panels. The low electricity output will probably mean the investment isn’t worthwhile.
The output of solar panels is highest in the South East of the UK (really good on Jersey and Guernsey), and it slowly diminishes as you go north. This is something you need to consider. While this is the case, the output is only slightly less in the northern areas.
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