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Solar and reinvesting in the farm business

Does a ground mounted solar development on farmland mean reinvestment into the farm business?

Time and time again we have seen developers claim that the income a landowner receives from a ground mounted solar development, will enable them to invest in their farm business.

Enso Energy state in their Agricultural Land Use document for application DC/20/05895 & DC/21/00060 for example:

“…the revenue from solar rental will help the two affected agricultural businesses to reinvest in the remainder of the farm holding…”

But is this entirely accurate?

Let’s take an illustration of a second-generation family where the farmer has passed away and left the farm to his three children, a boy and two girls.

The girls marry outside the farming community and the son is running the land. The productive acreage is not sufficient to provide an income for all three families nor to employ staff to work it, so the land work is carried out by contractors.

An offer is made by a solar developer to rent a substantial area of land for solar panels, and that area is lost to production.

The farm is run as a limited company with three directors (the three children) each with an equal share of the farm profits.

On the face of it the solar offer would seem silly to refuse. The daughters would have 33% each of the profit to spend as they wish but nothing to do with farming. Why should the farm interest them?

The son has no need to invest in the farm or any equipment because he has no need or use for it. All the work is contracted out. There is no point in investing in the farm because it is less viable as a farming business than it was before. Investing in the farm is now money down the drain. However, he still gets a steady income.

As a result the rental income is not reinvested in the farm business, and any local or regional benefits if it had been are now non-existent.

There are many permutations of the above illustration, and each individual situation will have it’s nuances. But remember, there is no guarantee that any rental income from any solar development would be reinvested into the farm.

“If agriculture goes wrong, nothing else will have a chance to go right.”

M. S. Swaminathan

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