Farmers have always looked to technology to improve efficiency in their businesses. Over the last few decades, it has come to play an even more crucial role in farming, both in terms of harnessing technological advances to improve productivity, and, helping to tackle climate change. There is global pressure to reduce the use of fossil fuels, reduce carbon emissions, and produce clean energy using land-based renewables. There are opportunities for farmers and owners of agricultural land to help fight against climate change and also to generate additional income and diversify their businesses by using renewable energy schemes.
The importance of the rural economy to such green energy schemes is significant. In the UK, farmers manage over 70% of the land, so there is huge potential to harness the natural resources available to farmers for the benefit of the environment and the agricultural industry. Importantly, there is a lot of scope to accommodate alternative energy production without detriment to existing agricultural business uses.
Given the challenges that a lot of farmers have faced in recent times, many will be looking at ways of diversifying the use of agricultural land and creating opportunities for extra income. Renewable energy schemes are ideal. Some areas of their land may not be useable or profitable for traditional agriculture, so schemes such as solar and battery storage, wind farms and biomass technology make good alternative uses. These schemes have many benefits to farmers, including reducing the cost of their traditional energy usage by utilising renewable energy and obtaining an income from leasing energy production rights to third parties. Farmers can also use such schemes as a way of appealing to customers who are increasingly conscious of the environmental impacts of food production.
The sale and leasing of land for renewable energy use are both options depending on the land owner’s preference for capital or a longer-term regular income stream. Taking professional advice when negotiating the terms of a renewable energy installation agreement is essential, and input from specialist planning advisors and surveyors is critical. Such agreements usually involve a long-term commitment, and the financial and practical implications of such commitments will need careful consideration. Advisors may also be able to negotiate terms that allow landowners to use some of the energy generated by these schemes or take a share of the profit from the sale of the energy. There are a range of deals that can be struck and opportunities to tailor schemes to a variety of farming enterprises of differing sizes.
If you have any more questions regarding the renewable energy schemes or would like further information on how we can help, please do not hesitate to contact a member of our Agriculture Team on 0161 941 4000 or email the Agriculture Team.