Is solar a good investment for farmers?

The news is constantly filled with stories of larger and larger solar panel installations. For example, the 1.4MW Wheal Jane Park in Truro, featuring nearly 5,700 solar panels, and generating enough electricity for 400 homes. Such large investments require a very good return to justify so much capital expenditure. Solar panels are eligible for the Feed In Tariff - an inflation-linked, tax-free scheme which pays you for generating electricity and then selling back to the main grid, with different rates paid out dependent on the size of the system.

However, you may have read that, as of 12th December 2011, the Feed in Tariff has been cut dramatically for many sizes of installations. Could your farm still benefit from a solar installation like this, or is it an idea that is now off the cards?

The vital point is that the decreases to the FIT are not by the same percentage across the different range of system sizes. Indeed, the smallest percentage decrease has been for the largest, commercial-sized installations. Here is a table of the changes along with an explanation of typical installation sizes:

Up to 4kW (household sized): 21p / kWh (previously 43.3p for retrofit / 37.8p for new build)
>4-10kW (a barn roof): 16.8p (previously 37.8p)
>10-50kW (one very large or several barn roofs): 15.2p (previously 32.9p)
>50-150kW (a small field of solar panels): 12.9p (previously 19p)
>150-250kW(a very large solar farm, over an acre): 12.9p (previously 15p)
>250kW-5MW (a 5-30 acre installation, amongst largest solar farms in UK): remains at 8.5p

The amount of electricity you generate is very dependent on the precise location of your property, the type of panels used, and so on. In fact, the main reason for these decreases to the Feed In Tariff is that the cost of solar panels has plummeted since the scheme was first introduced hence the government want to keep the returns around 7% (they had shot up well above this due to the fall in cost over the last few months), so as an investment, particularly for large installations, the returns are still very attractive and, yes, they do still generate electricity when the weather is poor!

By James Hawkins, creator of Talk