Solar panels get €1,000/acre so what’s the catch?

Kerry2021 · 19-02-2024 1:14pm

I wonder why more people aren’t doing it? For people in tillage with a big stretch of land you’d imagine it’d be a no brainer, it’s not like they’d have a lot of money invested into the farm in terms of buildings etc and tillage has basically zero of a return from what I hear

Donald Trump · 19-02-2024 2:22pm

https://www.boards.ie/discussion/comment/121787717#Comment_121787717

What would happen to the value of your land if, suppose in 10 years you want to sell up, but the buyer of the land would be stuck with a contracted price of 2k per acre for the remaining 20 years when the going rate for panels at that time is now 4k an acre?

That's even ignoring the issues that not everywhere will get planning permission for the solar farms.

Kerry2021 · 19-02-2024 3:25pm

At 8.53am today Bazzer007 said in a post that the payments are index linked so according to that you’d be getting whatever the going rate is forever more.

I’d know nothing about the situation as regards anyone trying to sell the land during the 30 year lease, I don’t think it’s something many people would have an interest in

alps · 19-02-2024 3:55pm

https://www.boards.ie/discussion/comment/120531054#Comment_120531054

50% tax on €1.800 is still €900....and index linked.

Very few live next door to someone willing to pay €500 to €900 index linked for the next 25 years.

As long as Solar Land does not exceed 49% of holding, or what's being transferred, agricultural relief applies.

Sell your BP. When you get your land back, you can apply for a new one.

A bond will have to be lodged with the County Council to make provision for reconstitution of the lands in the event of the solar company not doing so.

You will be left with reconstituted land, or not if you wish, plus a grid infrasture to your farm that may be a huge asset in time..

Donald Trump · 19-02-2024 5:42pm

https://www.boards.ie/discussion/comment/121788443#Comment_121788443

The contract would be between you and the operator. There would be no rules as to what the terms would have to be.

"Index linked" could mean anything as it would depend on the index. If you had rented out your land in 1980 on a 50 year contract at a good yearly rate for then and had the repayments linked against a milk-price index, you probably wouldn't be too happy today. Are you going to link it to CPI (easily measurable) or some unofficial index of energy prices that may or may not exist in 20 years?

Bazzer007 · 19-02-2024 5:59pm

https://www.boards.ie/discussion/comment/121789156#Comment_121789156

CPI would be the norm.

If really interested in going that route get a good land agent involved. There's not much of a catch really as plenty of these farms are now operational. Speak to the owners and let them tell you what's involved. I've heard of lads getting over 6k per acre for battery storage depending on planning. 20k sign on etc. Planning for wind turbines is easily taking over a decade now.

Donald Trump · 19-02-2024 6:18pm

https://www.boards.ie/discussion/comment/121789236#Comment_121789236

That was the point. CPI might not keep the landowner at "the going rate" as regards money being paid for land. It could be more or it could be less. Especially with something like renewables where there would be advances in the technology itself.

On the other hand, it could hypothetically work in your favour if CPI went way ahead of the going rate for land. But in an extreme scenario the company renting the land could just walk away and fold up.

Bazzer007 · 19-02-2024 6:36pm

https://www.boards.ie/discussion/comment/121789338#Comment_121789338

There's always an element of risk but with CPI you have some level of protection. I know farmers who leased land at €500 an acre and they're not getting paid. It was fine in 2022 when the milk price was strong. In reality, most newly leased farms are making €300 to €350 max. If you can get €1500 to €1800 an acre you'll be set up for life.

Insurance bonds can protect you by returning the land to its original condition. In reality with the level of investment involved the solar farm would be purchased by another company. Obviously there's risk involved but not as much as trying to milk cows and spending big money trying to keep up with the latest regulations.

Donald Trump · 19-02-2024 6:49pm

https://www.boards.ie/discussion/comment/121789417#Comment_121789417

A receiver can repudiate any lease. That's besides the point.

My point about the index linking was to the poster who assumed that they would always get the "going rate" of the day. I did not say there would be zero protection - I just pointed out that their assumption was not exactly correct.

Kerry2021 · 19-02-2024 8:47pm

I wonder on what ground a solar panel wouldn’t get planning permission? I’ve actually never laid eyes on one myself so they must have a tendency to put them in out of the way places.

roosterman71 · 19-02-2024 9:36pm

https://www.boards.ie/discussion/comment/121789948#Comment_121789948

Plenty haven't got planning. Search any of the counties planning lists and you'll see many rejected.

If you fly into Dublin on a fine day and come at the airport from the Kildare/Meath direction you'll see the finest of tillage land covered in panels. I was amazed when I seen it last time

pureza · 19-02-2024 11:31pm

The crowd doing the rounds in my area in the southeast are offering €1300 an acre index linked

They will pay an upfront sum non refundable for you to sign up to an agreement that becomes official if they get planning

They pay all the costs including your legal fees

You are taxed at 40% btw the same as renting a house,meaning you get 650

Unlike retirement relief there is no cap on how much you can earn

So if you give them 150 acres you will end up with 97k+ into your hand

Renting the same if over 55 and retiring at say 400 an acre,you'd get 60,000 but would be taxed on on 16 k of that minus your allowances

Those are rough calculations, so you can see why it's tempting for some given its guaranteed,whilst the farmer rental isn't

50HX · 20-02-2024 12:19am

https://www.boards.ie/discussion/comment/121786799#Comment_121786799

Are you in a hen harrier zone, if so you may qualify for a proposed new scheme to not replant a felled forestry plot as part of the threat response plan to low harrier numbers

Kerry2021 · 20-02-2024 9:38am

My own personal take on it all is a person would want to be in a position where they could afford to set up a company for the income from the solar farms and to not be drawing a wage out of it and buy property then out of the solar farm rental money.

i wonder would any flat land that’s south facing be suitable for the solar panels? I take it north facing land wouldn’t be accepted.

you’d hear of people doing once a day milking, putting in robots even to milk their cows and you’d have to ask the question would those people be better off to just put in solar panels?

I saw videos on YouTube of solar panels in Ireland and they don’t look that bad, I can easily imagine the land being farmable again once the lease is up

Water John · 20-02-2024 10:21am

The main factor is the electricity grid and stations in the area, with spare capacity.

SodiumCooled · 20-02-2024 10:44am

https://www.boards.ie/discussion/comment/121791359#Comment_121791359

Not sure I agree with all the setting up companies etc - at the end if you ever want the money out you are going to be taxed. My take is you are as well off to just treat it as income, max all reliefs like as much as possible into your pension and just take the rest like a wage.

There is no talk of any around us at the moment but what I would see it as is my pension if there ever was an opportunity. Like many my pension isn’t great due to starting paying too late and there is only so much you can afford monthly now but a solar or wind turbine would allow me to max my pension for years to come and probably actually retire at a normal age along with the left over additional income every year (after tax).

Given the option a wind turbine would be far more preferable also, wouldn’t be a fan of giving up so much land to solar whereas a turbine you might only lose half an acre plus a bit for the road into it and you can farm away as normal.

Kerry2021 · 20-02-2024 2:26pm

https://www.boards.ie/discussion/comment/121791546#Comment_121791546

As regards the pension as far as I know because the income from the solar farm would actually be from what’s essentially rent you wouldn’t be allowed put it towards your pension. I know that’s the case with the rent of houses anyway.

for round figures let’s say a person earns €50,000 in their job and €50,000 from the rent of houses and we’ll say they’re 35 years old. They’d only be allowed to put in 30% of the income from their job. The rules are a bit funny when it comes to “unearned” income. You could save the money up in the company anyway, when you’d retire you could draw out a wage from it each year and keep yourself on the lower tax rate so it’s apples and oranges anyway really

SodiumCooled · 20-02-2024 2:35pm

https://www.boards.ie/discussion/comment/121792492#Comment_121792492

As regards not being able to put the solar income into a pension - I don't know the ins and outs but the simplest solution regardless would be to just max your contribution from your job and compensate the drop in take home pay with the solar income.

Agreed there is different ways but I've heard discussions on using companies to avoid tax before and it often doesn't make sense. But there are a lot of variables and it will be down to each individual case most likely.

techman1 · 21-02-2024 2:17pm

you fly into Dublin on a fine day and come at the airport from the Kildare/Meath direction you'll see the finest of tillage land covered in panels. I was amazed when I seen it last time

It's madness for the government and the stupid green greens to be encouraging this. Solar farms should only be installed on barren lands in southern Europe and North Africa where there is loads of sun , and barren dry land. We are doing the opposite covering the best most productive land on the planet with this industrial junk . There is no shortage of barren sun drenched land in the world however there is a shortage of arable fertile land with great rainfall. Eventually ireland will have to goto nuclear energy anyway

Who2 · 21-02-2024 2:23pm

Would a self administered pension fund not be an option here or is that loophole still open?

Kerry2021 · 21-02-2024 8:58pm

https://www.boards.ie/discussion/comment/121797326#Comment_121797326

My SO works in the renewables industry and apparently offshore wind turbines are the next big thing. They’ll create massive amount of energy, won’t really be in anyone’s way and I was told they won’t require much maintenance.

I agree with you that it’s a shame that such good land is put into solar farms.

I recently read the average Canadian dairy farm has 96 cows, they make 225,000 Canadian dollars per year on average which is €150,000. In Canada they get very harsh winters which means they’ve to have absolutely top notch farm buildings which cost a lot of money obviously. My point is that shouldn’t Irish dairy farmers surely be able to make €1,000 profit per cow in an average year given that we’ve got one of the very best climates in the world for dairy farming.

I think people only go into solar farming because they get sick of working for nothing

roosterman71 · 21-02-2024 10:06pm

Offshore wind is indeed the in thing, but it's as yet uncosted. There's a plan for 37GW of it off the coast, 50% of which is earmarked for hydrogen production. The price of building these things isn't known and Eamon Ryan gave a ballpark €100 billion just to erect them. Doesn't include maintenance (and it's at sea, there'll be costly maintenance [there's lots of maintenance on land based turbines]), doesn't include the infrastructure to get the power to land, doesn't include the grid updates, and doesn't include anything to do with hydrogen (facilities, maintenance again, storage, etc).

Irish dairy would make that money if Irish farmers were paid right

Victor · 21-02-2024 10:18pm

Take a look here: https://openinframap.org/#9.43/53.4079/-6.441/P,S - the red / orange areas (not dots) are solar farms.

This is something I have been following loosely. The price offered will vary and will typically have little to do with the farming value of the land.

The typical arrangement is that a power company (there are now many of them), through a subsidiary, will enter into an arrangement with a land owner and bid for a connection to the grid. Suitable land (physically suitable, but also planning permission, access, etc.) for solar and an easy connection to the grid are the most important aspects. Somewhere next to a factory with large demand will do much better than somewhere west of Dingle. One issue with some substations is that they have constant demand, but nobody is generating power locally, so there is plenty of supply capacity. North facing panels are at a disadvantage, but north facing sites are not necessarily a no-no, depending on slope. The bigger the solar farm, the more that certain costs can be shared.

The power company will design a solar farm and apply for planning permission. Often, this will be a 10-year permission (instead of the normal 5-year), which means the project can be constructed at any time 10-years after the planning permission was received.

The planning permission will be to have the solar farm there for 25-40 years, which will be equal to the number of years for which the solar farm has a contract to be connected to the power grid. After that, things will need to be decide. Is there demand for the energy? How much is maintenance and repair? Does the money stack up? I can see many leases being renewed. Backing out part-way through the lease in unlikely to be an option.

Each power company will probably offer different terms and conditions. These T&Cs will be as important as the headline price offered for the land. It would be important to get proper advice. Some will offer you X per area of land. Others will offer Y per kWh sold. Other will offer a %.

If the power company goes bust, I can see a bidding war for the assets – most of the costs have been paid and there is still lots of income to happen.

Depending on the solar panel design, sheep grazing or similar light-medium use might be possible. Cattle are probably a no-no. Grass and arable might be impractical.

Cables are invariably buried to avoid damage and the access roads no more intrusive than other farm access roads. The power company may even upgrade some of your farm roads.

Nobody is saying that you have to go 100% into solar.

Ideally, battery stations should be located right at the substation. There are three main types of battery station. Some can power a whole town for several hours in the event of a power cut, but the main intention is to cover occasional blips in the system – they can react in milliseconds. Others are purely commercial - the idea is that they buy power cheap off-peak and sell at on-peak at a higher price. Wind and solar farms may have batteries to use when directing the wind turbine / solar panel in the right direction – this means they don’t need to buy power back from the grid to do this. Battery stations are relatively small in size, some well under a hectare.

In some places, it may make sense for groups of landowners to come together and ask the power companies to bid against each other. The farming organisations should really be doing work on this - to agree standard contracts, inform farmers, and offer advice. The organisations will need to tread a careful line between individual groups of farmers cooperating and a farm organisation engaging in monopolistic behaviour.

It would be important to get proper legal and tax advice. I’m not sure that forming a company is the way to go. Note that certain businesses can get similar inter-generational tax reliefs to farming. Indexing of values could be based on the CPI, the cost of capital goods (solar panels) of the cost of electricity.

Banks and investments funds are interested in sustainable energy as they put them together is ‘green energy’ funds. This means there is a market for solar farms and the companies involved.

Bazzer007 · 27-02-2024 12:25pm

https://www.boards.ie/discussion/comment/121800181#Comment_121800181

Regarding battery stations, according to the Farmers Journal, farmers adjacent substations are being offered 20k to 25k per acre. Some money. Renewable companies looking to option 4 to 6 acres.