solar and wind farm

Land lease for renewables after FiT – do the numbers stack up?

Land Lease for Renewables post feed-in tariff

The end of the Feed-in Tariff in March 2019 was a seismic event for onshore renewables. The scheme, focused on <5MW renewable generation, was a huge success. Over the lifetime of the FiT, there were a total of 860,257 solar PV installations (5,127 MW) and 7,561 wind installations (770 MW) ( https://www.ofgem.gov.uk/feed-tariffs-quarterly-statistics)

The scale of installations (<5MW) also played a major part in decentralising and democratising energy generation, putting generation assets within the reach of businesses, landowners and communities.

It would be fair to say that the industry held its collective breathe a little when the scheme drew to a close. What would the future hold for onshore solar and wind?

In fact, that future, now the present, is bright.

Land lease for Renewables: Our 2021 pipeline 

So far in 2021, Locogen has signed up some 1,600 acres of land (400 MW) for solar development across the UK, of which 300MW is already progressing through full grid applications and planning pre-applications.

In wind, we have signed-up around 350 MW of sites, across 4,624 acres.

Certainly, some of these projects are “FiT-Scale” but the removal of those tariffs has meant that landowners and developers are no longer swayed by those payments and larger, utility-scale developments are increasingly being considered.

A major driving factor for these developments is cost reduction. Wind turbine prices, for example, have reduced by 44%-78% since 2010 (https://www.irena.org/costs/Power-Generation-Costs/Wind-Power)

At the same time, technology improvements and larger turbines mean more energy generated from sites for any given wind speed. Thus, sites that were previously judged to be uneconomic may now be perfectly viable.

There is a similar story in solar PV. Strikingly, crystalline silicon PV module prices have fallen by 90% since 2010. Costs of ancillary equipment, such as inverters and racking, along with installation services, have also fallen. https://www.irena.org/costs/Power-Generation-Costs/Solar-Power

In short, even if your land has previously been assessed and adjudged to be uneconomic for renewables land lease, it might be worth having a second look.

So, what are some of the characteristics that might make your land suitable for wind or solar development?

Suitability of land for solar development

There are a variety of factors that will affect how suitable your land might be for solar development. Below are some of the most important considerations.

Land type

Brownfield land – previously developed or industrial sites, can be ideal.

Development on class 1 or 2 agricultural land would not normally be permitted, while grade 3a land would need considerable supporting information. Grade 3b, 4 and 5 land is more suitable.

Solar resource

As you might expect, solar resource varies across the UK. But this isn’t due to latitude alone (see diagram). In Scotland, coastal areas may have more irradiation than you thought.

Aspect

Clearly a southern aspect is ideal. Land that needs to be levelled or contoured will add cost.

Grid / off-taker

Grid constraints are a growing issue but the picture varies considerably depending upon location. Where grid is constrained, a nearby large energy consumer can mitigate that by directly taking the power generated.

 

Complexities

Features such as trees, footpaths, overlooking housing or any special land designation (SSSI, AONB, etc) can impact the suitability of your site.

wind speed map
Average UK wind speeds (M/S)

Special Designations

Any special designations on your land, such as Sites of Special Scientific Interest, Outstanding Natural Beauty etc. will add complexity, as will proximity to listed buildings or ancient monuments.

Ecology And Wildlife

Impact on flora and fauna needs to be considered, so initially we will check for special protection areas, ancient woodlands and bird or wildlife reserves.

Aviation And Exclusion Zones

We will investigate whether your site is subject to any MOD exclusion areas or aviation restrictions.

Suitability of land for wind development

Just like solar development, there are a variety of factors influencing a site’s suitability for wind farm development. Key issues include:

Wind resource

As a rule of thumb, we need wind speeds of 6 m/s or more for a site to be viable. Wind resource can be more site specific than solar, depending on elevation and surrounding geography, but we can use some tools to do a first pass desk-based assessment of the resource at your site.

Grid connection

Grid constraints are often an issue and connection costs can be considerable. We will advise on likely charges and build this into our commercial assessment. We can also look for potential off-takers.

Proximity of settlements

Any wind development needs to be sited at an acceptable distance from domestic properties to avoid issues such as noise and shadow flicker from the turbine blades.

Site access

Turbine blades and towers are sizeable and often demand specialist vehicles to transport to site. Major plant, like cranes, also need access. An assessment needs to be made on the feasibility of site access and the cost of access track construction and any improvements needed to local roads.

 

Solar farm construction

Land lease for wind or solar: the economic case

Leasing your land for solar or wind development can transform the economics of marginal agricultural land. There is no requirement for any upfront investment and no ongoing maintenance costs. Leases are long-term, typically 20-25 years, allowing you to plan and project revenues long into the future. Returns are secure and extremely low risk.

In some cases, solar farms can be designed such as to allow for sheep grazing on the land, while livestock can certainly be reared on wind farm sites.

Land lease for renewables: the perfect site for wind or solar development?

It’s unlikely that your site is completely perfect for either wind or solar development. Most sites will have challenges in one or more areas. Our development team have assessed hundreds of sites since 2009, and we’ve delivered dozens of projects, and that experience allows us to weigh up every facet of a site and accurately assess likely returns.

Our assessment is free of charge and carries no obligation, so if you are looking to diversify and have some land that you think might be suitable, why not get in touch?

Locogen Developments Director Stuart Hamilton

Locogen Developments Director, Stuart Hamilton

"We're delighted with the progress made by our developments team this year. There's no doubt that falling prices and improved technology have transformed the economics of land lease for renewables development, so it's definitely worth having your land assessed - even if it's been looked at before. "

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