Energy vs food: the difficult choice facing farmers
With rising energy prices and shrinking profit margins, many Yorkshire farmers are facing a difficult decision: dedicate valuable fertile land to energy production to keep a business afloat, or keep it for food production, writes Helen Barton, Wilkin Chapman Rollits
For farmers considering the former, there are a few different options available. They may choose to install their own solar panels to generate electricity for energy-intensive operations, with any surplus energy being sold back to the grid.
Alternatively, they can negotiate with a developer to let some of their land for solar schemes. The developer then sells any electricity produced to the grid. This offers long-term rental income, and often a profit share, helping to safeguard land for future generations and allowing farmers to focus on other productive land, improving overall yield and financial resilience.
Usually, a farmer will enter into an “option” document, giving the developer the right to call for a lease to be granted at a later date. The developer takes on the commercial and financial risk of obtaining planning permission and grid connection, and covers the farmer’s professional fees. During the option period, the farmer can continue their usual operations.
Why you need advice
Solar leases are long-term commitments, typically lasting around 40 years. Well-drafted agreements require the developer to decommission the project and restore the land at the end of the term, allowing it to return to agricultural use. Over time, soil recovers from the break in intensive cultivation and fertiliser use, naturally regenerating over the lifespan of the panels.
While land accommodates solar panels, conventional crops are usually replaced with managed grassland or wildflowers. This might appear to be a compromise, but properly managed grasslands can potentially store more carbon in soil than they lose. Once captured, this carbon can be measured, verified and turned into tradeable credits, which companies can purchase to offset their emissions. Farmers should ensure their lease allows them to benefit from any carbon credits generated.
Livestock farmers may want to check that the lease permits sheep or poultry to graze around and beneath the panels. This can be risky though, as famers may be liable for any damage caused to the equipment by livestock. Panels must be mounted at suitable height to minimise this risk.
Many farmers may be troubled by decisions to rent out land for solar panels. However, with the right advice, it could help preserve farms as viable family businesses for many years to come.
Landowners who need advice on solar farm developments or other renewable energy projects can email me at [email protected], call 01904 625790 or visit wilkinchapmanrollits.co.uk
Helen Barton is a partner and head of energy & renewables at Yorkshire and Lincolnshire law firm Wilkin Chapman Rollits