Farmers could be denied almost £900 million from solar generation

New analysis from the Energy and Climate Intelligence Unit (ECIU) has found that farmers without solar panels could be missing out on up to £1 billion over two years.

Many farms that already have renewables are using some of the energy they generate themselves so reducing their bills. But almost 80% of England’s farms do not have solar. If they did, the Government would also be saving hundreds of millions of pounds on its Energy Bill Relief Scheme support package for businesses' energy bills.

However, the Government looks to be seriously considering extending a solar ban to cover 3b “sub-grade” agricultural land. This would mean that Grades 1-3 (3a and 3b) agricultural land will be covered by a planning presumption against solar, a total of 41% of land in England [1]. Most ground-mounted solar is currently put on Grade 3b land, and many farmers are concerned about the Government extending the solar ban to this land.

The latest Government figures show that farming and other businesses paid 98% more for gas in the second quarter of 2022 than in the second quarter of 2021 [2]. Gas prices are expected to remain high for at least two years, with industry experts predicting above average prices for the rest of the decade [3].

Meanwhile, new polling for ECIU has found that 60% of people say they’d “think less” of their local MP if they campaigned against the development of a local solar farm [4]. Separate polling found that just a third (32%) of MPs think more people in their constituency would support, rather than oppose, a new solar farm in the area [5].

More Conservative MPs (37%) believe opposition would be higher among their constituents than support – just 19% of Conservative MPs think most constituents would support a solar farm. For Labour MPs, half (49%) think most constituents would support a solar farm, compared to just 12% who think their constituents would be more likely to oppose one.

Yet in reality, polling has found 80% of people say they would support a solar farm being built in their area [6].

Robbie Moore, Member of Parliament for Keighley and Ilkley, said: "As gas prices rocket some farmers’ energy bills have gone through the roof. Having come from a farming background I know how much of a challenge unexpected extra costs can be. One of the best solutions is to have more renewables on farms. As long as care is taken to avoid land that’s needed to produce food they can help cut bills, bring in extra income, and achieve net zero."

Matt Williams, Climate and Land Programme Lead at the Energy and Climate Intelligence Unit (ECIU), said: “Farmers are being hit by a double whammy of rising energy costs due to the surge in the gas price, and record prices for synthetic fertilisers which are made using gas. On top of that many are losing income as crops fail due to extreme weather driven by climate change. Some are choosing to leave the industry altogether as a result.

"MPs campaigning against solar farms might want to check that they are really reflecting the views of their constituents and not alienating them."

Despite being the cheapest forms of energy and more than two thirds of Conservative Party members backing more wind and solar [7], there are rumours that the DEFRA Secretary is set to extend the de facto ban on solar farms in England to a wider area [8].

Not all farmland will be suitable for solar, if the land is too high quality and must be preserved for food production, or if it is not suitable terrain, but solar panels can be placed on roofs and on lower value agricultural land. Although in both cases rural grid infrastructure can present challenges [9]. But a large swathe of land that could be used for solar looks set to be ruled out. Solar panels currently cover around 0.08% of total land across the UK, or 0.1% of UK farmland, only half the size of the Isle of Wight [10].

With gas costs expected to remain high for at least the next two years additional income streams like renewables may be essential to some farm businesses surviving. Only 22% of farmers in England have solar. If the remaining 78% [11] were to have followed their counterparts, over the next two years energy savings and revenues could have almost balanced out the increase in fertiliser costs, estimated to be £1.1 billion over two years [12].

Farmers are also facing financial challenges from a fall in crop yields due to the drought with the UK expected to produce only half of the potatoes that it normally would this year [13].

In the second quarter of 2022 businesses like farms paid 98% more for gas than in the first three months of 2021, and 45% more for electricity. Gas was used to generate around 40% of the UK’s electricity in 2021, but as gas sets the marginal price for all generation, electricity prices have also been driven up despite renewable electricity being cheaper than gas generation at present levels.

This has impacted many farmers, including those who use gas to heat glasshouses and grow products such as cucumbers and aubergines. Production of these crops could fall as much as 50% this year according to some estimates.

Renewables can also help farmers to reduce their reliance on gas and other high-carbon fuels, while producing their own energy and selling excess back to the grid. In some places, glasshouses that grow fruit and vegetables could replace the use of natural gas with heat pumps that use waste heat or renewable electricity. However, while from 2014 to 2016 the percentage of farms with renewables leapt from 18% to 29%, it has since flatlined at around this level, reaching only 32% in 2021 [14].

Farms with renewables, such as solar panels, wind turbines and small hydroelectric plants, can earn extra income from power purchase agreements by selling excess energy back to the grid or by leasing their land to energy generators.

ENDS

Notes to editors:

1. The Government’s plans to extend a presumption against solar to Grade 3b agricultural land (it already includes Grades 1, 2, and 3a). This would mean that in total solar would be banned on around 41% of all land in England. https://www.solarpowerportal.co.uk/news/solar_sector_hits_back_at_suggestion_jayawardena_will_redefine_bmv_land_to
2. The Government’s latest Q2 2022 energy costs show that businesses paid 98% more than for gas in early 2021. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1107499/quarterly_energy_prices_uk_september_2022.pdf
3. https://www.cornwall-insight.com/press/energy-prices-to-remain-significantly-above-average-up-to-2030-and-beyond/
4. Polling conducted by Opinium, Sample size: 2,000 adults in GB. Fieldwork: 6th-8th November 2022.
5. Polling conducted by YouGov among 103 MPs between 20th September and 13th October 2022.
6. Polling conducted by YouGov. Sample size: 1896 adults in GB. Fieldwork: 21st - 24th October 2022.
7. Conservative members back new renewables, ECIU polling https://eciu.net/media/press-releases/2022/poll-conservative-membership-backs-wind-and-insulation-drive-ahead-of-winter-bills-crisis
8. https://www.theguardian.com/environment/2022/nov/17/de-facto-ban-on-solar-farms-in-england-to-continue-therese-coffey-signals
9. NFU recommendations on rural infrastructure, including grids https://committees.parliament.uk/writtenevidence/9848/html/
10. UK land use for solar in March 2022 according to Solar Energy UK https://solarenergyuk.org/wp-content/uploads/2022/03/Briefing-Fact-Checker-1.pdf
11. 106,000 farm holdings in England https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/834432/evidence-compendium-26sep19.pdf; 78% do not have solar https://www.gov.uk/government/statistics/historic-farm-accounts-in-england. The average earnings from solar for a farm are £5200 per year. 82,680 farms do not have solar; 82680 x 5200 x 2 years is £859,872,000 or £850 million that farmers are missing out on in farm income each year.
12. ECIU analysis on the extra bill farmers are paying for fertilisers due to the cost of gas https://eciu.net/media/press-releases/2022/two-more-years-of-high-gas-prices-could-leave-british-farmers-paying-1-1-billion-extra-for-fertilisers
13. Drought group told that 50% of potatoes and other crops could fail https://www.theguardian.com/environment/2022/aug/12/drought-declared-england-hosepipe-ban-water-restrictions
14. Average farm income from solar £6300 per farm https://www.gov.uk/government/statistics/historic-farm-accounts-in-england

For more information:

George Smeeton, Head of Communications, ECIU, Tel: 07894 571 153, email: george.smeeton@eciu.net

This press release has been updated to amend the total amount potentially available to farmers from “almost £1 billion” to “almost £900 million”.