Farmers Moving to Renewable energy - Solar Energy

Farmers Moving to Renewable energy - Solar Energy

Nearly 14 per cent of Australia’s electricity came from renewable sources in 2014, enough to power 4.5 million average homes for a year.” (Clean Energy Australia Report, 2014)

Solar farming provides a great opportunity for Australian farmers to increase the value out of their land, while supporting Australia’s demand for renewable energy sources.

With demand for renewable energy in Australia set to continue rising to accommodate an increasing population and to meet the Federal Government’s renewable energy targets, solar energy production on farmland is becoming increasingly attractive.

Australian farmers are well-placed to lead the way in renewable energy production because they may have some open, undeveloped or unproductive land which provides an opportunity to explore the development of renewable-energy technologies.

A range of renewable energy production options are available to farmers and one of the most viable and commonly used on Australian farms is Solar Photovoltaic Power.

Solar photovoltaic power (PV) involves the collection of solar ultraviolet (UV) radiation from the sun. Solar panels and other types of PV systems are composed of layers of conductive material – usually silicon sandwiched between sheets of tempered glass. When light from the sun shines on this material, the material absorbs energy from the light and creates an electrical field.  

Are you considering solar energy production?  Make sure your investments are protected. 


There are many benefits in using your land to produce solar energy, including:
  • getting value out of currently unproductive land
  • PV panels can be a cheaper option than connecting new electric lines to the grid, especially for farms in more remote locations
  • a significant reduction in your energy bills
  • opportunities to sell power produced back to the grid
  • opportunities to lease your land to power companies for solar farming.
However, there are also additional risks associated with the adoption of this new technology and it pays to be aware of them to ensure you have appropriate insurance cover to protect your investment in solar.

If you’re currently producing or considering producing solar energy on your land, it’s worth considering the following risks you may be exposed to:

Small Farm Operations

If your solar panels are in exposed locations so you may need additional cover against damage from storms, hail or fire.

Damage to your solar panels may cause an interruption to the generation of electricity, and consequently,:
  • increased costs of working (as you may have to buy more electricity or
  • a loss of income (as you are unable to sell electricity back to the grid)
  • If you have signed a contract with any energy company you should review it to see if it has any insurance implications, particularly in respect of liability, and ask for advice if necessary.

Large Farm Operations

If you don’t own the panels but they are on your land (eg by a lease agreement, and/or with royalties paid) and the panels are damaged, the lease fees/royalties may not be paid to you.  Are you prepared for this happening?  It may result in a loss of income for you.
 
If you have signed a contract with any energy company you should review to see if it has any insurance implications, particularly in respect of liability, and ask for advice if necessary.

Loss of income can be protected against by taking out Business Interruption insurance.

To ensure you have the right cover against these risks, and for more information about the insurance implications of renewable energy production, please contact your broker or visit cgu.com.au