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Strong Demand Returns for Land to Build Solar Parks
2012-05-25

Solar park developers are offering significant rents to farmers and landowners who can provide 25+ acres of land for the development of solar photovoltaic (PV) parks.

Solar park

Solar park

Around £50,000 per annum rent will be paid by developers for a 50 acre site. The demand for suitable locations in the south of England and Wales is due to the dramatic fall in price of solar PV technology. Developers also plan to build much larger parks to take advantage of Renewable Obligation Certificate (ROC) payments.

Harry Edwards, a renewable energy consultant at Fisher German, comments “Solar PV parks were extremely lucrative around 12 months ago as the high Feed-in-Tariff (FIT) payments provided healthy profits for parks with maximum outputs of 5MW. When the government reduced the FIT payments many projects were shelved.

“However, due to a combination of falling technology prices and ROC payments, solar parks have become attractive again. ROC payments are available on much larger projects than FIT projects. FITs are only eligible for solar parks with a maximum output of 5MW which would typically be 25-30 acres, whereas ROCS have no limit, allowing much larger solar park development.

“Solar developers are looking for sites typically of 25-50 acres and will take on the planning cost and risk, funding a project through to commissioning. A typical lease for a solar park is 25 years with rents currently in the region of £1,000 per annum per acre.

“The majority of the electricity produced will be sold by the developer back to the grid; however, the farmer could strike a deal to buy electricity at a reduced rate in addition to receiving the rent.”

There is a range of criteria that developers look for when deciding if a site is suitable:

  • 25-50 acres is normal but no upper size limit
  • Ideally flat ground or gently sloping south
  • Site not overlooked from public vantage points or neighbouring houses
  • Easy access for construction and maintenance
  • No obstacles which would cast shadow
  • Site not liable to flooding
  • Proximity to 33kV overhead power line, ideally within a few kilometres of a 33kV-11kV substation
  • Ideally sited in the south of the country, and on low grade land outside protected areas

Harry Edwards advises “It is important to get the agreement correct from the start as you will be entering into a 25 year relationship. If you have been approached by a developer or think you have a suitable site then I would advise getting the correct professional advice as soon as possible.”

For further information, please contact Harry Edwards on 01858 411204 or email harry.edwards@fishergerman.co.uk

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