Making energy while the sun shines
More than three years on since the launch of the UK government’s FIT scheme, which promoted solar photovoltaic (PV) schemes to landowners, the legislation and payment aspects have stabilised, and consumer confidence is returning to the market. There remain a multitude of viable untapped opportunities for Scottish landowners despite tariff reductions and uncertainties.
On the 13th May 2014 the Department of Climate Change announced that they propose to no longer support large scale ground mounted solar parks (5MW +) under the Renewables Obligation scheme from April 2015. The schme will be replaced by Contract for Difference (CfDs). This mechanism is not yet finalised, yet there should be more clarity later this summer. Opportunities still remain for developing schemes that are less than 5MW and which equate to approximately 25 acres of land. Developers are still actively searching for sites within Scotland in both urban and rural locations.
While large scale solar PV projects in the south of England is reaching saturation point, the industry is in its early stages north of the border and there remain a multitude of viable untapped opportunities for Scottish landowners. Solar PV schemes, which harness the sun’s energy to produce electricity, are proving to be most efficient for properties with relatively high electricity consumption. While they can be viable in most locations, there can often be greater rewards for sites nearer to the coast.
Solar PV arrays both, on the roof of existing buildings and on the ground, have the potential to bring Scottish landowners and commercial property owners a host of benefits. These include a reduction in carbon emissions, increased energy security in an increasingly uncertain market, an additional income stream, reduced operating and energy costs, as well as enhancing a property’s marketability.
Savills has installed over 60 roof to schemes for clients across the UK, equating to a capacity of 3MW, some of which have been investor led. Such arrangements have often included an option to buy the system from the investor at a later date, providing a low risk method of installing a scheme with minimal outlay. These schemes provide clients with reduced on- site electricity costs and an income from selling or renting the site to the developer. The developer in turn receives payments from FIT, as well as for the electricity exported to the national grid.
Solar energy is a huge growth industry and there are many options for landowners to enter the market place. It is important to consider options carefully, source the right partner and obtain sound professional advice. Savills Energy specialists can provide a free site appraisal, including an analysis of likely installation costs as well as potential financial returns.