Ellacotts, an accountancy firm in Oxfordshire, contacted Richard Palmer to visit a farming client in the West Midlands who wanted advice on the potential to install a ground mounted solar PV installation on a small block of agricultural land (circa 2 acres). This was purely based on an investment decision.
On this plot of land (which forms part of a larger pasture field), in the green belt, the farmer had previously and unsuccessfully tried to get planning for caravan storage. The farming client had successfully diversified his farming business which includes a very successful self-storage business situated to the south of the plot of land. To the west and north, there is a Severn Trent Water sewage treatment works.
After meeting with the farmer at his site, Butler Sherborn were instructed, initially, to carry out a feasibility study and project viability appraisal. As part of this feasibility study, we considered the following:
- Grid connection
- Planning permission
- Energy Performance Certificate
- Electricity meters and on-site demand
- Sale of surplus electricity via the grid
- Size of the scheme & electricity production
- Panel and installer selection
- Tax and legal input
- Financial viability
- Funding options
We liaised with Severn Trent Water extensively, to discuss the following:
- Potentially putting in place a private wire to sell renewable electricity to their sewage treatment works site
- Wayleaves to cross their land to connect to the existing 11kV grid
- Minimum clearances for a sewage mains running through the plot of land where the PV would be situated
- Other Professional Advisors: At a very early stage, we liaised very closely with the client’s accountants, solicitors and bank.
The client approved the feasibility study and instructed Butler Sherborn to project manage a 250kW ground-mounted PV installation. We co-ordinated the grid application, planning application and legal rights to ensure the system could be built out. We made significant savings by installing a new electricity meter close to the PV installation and relocating the new transformer position.
We had prolonged negotiations with Severn Trent Water to agree the commercial terms for the Wayleave, which became a critical path for the project. We also negotiated the Power Purchase Agreement for the sale of electricity to an energy supplier.
Tender Process and Project Management
We carried out a tender process with four solar PV installers. A key part of the process was to make sure a 5 year Operation & Maintenance (O&M) contract was considered alongside the contract to build out the scheme. This tender exercise made significant savings relative to the initial feasibility study assumptions.
We managed the whole installation project, which included a site meeting with all contractors involved in the project setting out a clear project plan as timescales are critical for renewable installations to ensure higher tariffs are locked in. It was a relatively complex project because it involved National Grid, Severn Trent Water, Western Power Distribution and Solihull MBC.
Once the site was commissioned, we ensured a 5 year O&M contract was in place to safeguard the investment, particularly in the early years.
Return on Investment
The project delivers a double-digit return before tax on an investment cash flow basis; the total project cost was £320,000 (including all fees). This size of projects fits neatly within the current Annual Investment Allowance.
There is an equivalent saving of around 75 tonnes of CO2 (for the electricity generated), a significantly improved EPC rating for the self-storage unit and the intangible PR value / social responsibility to the farmer and his businesses.
The client is so pleased with his investment that we are currently running another feasibility study for a similar system on another site (for his other diversified businesses).