FARMERS AND LIVESTOCK

A livestock farmer’s income is dependent on many factors which include: geographical proximity to markets; fertility of the land; health of the stock; growth rates; floods; and drought. It can be a hard life with all the variables mentioned impacting heavily on the ability of the farmer to break even let alone make a viable profit. In addition, local market prices for both live weight and carcasses fluctuate due to market forces.

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FARMING COSTS

Their situation is also compounded by feral animal attack, stillbirths, disease, vaccination costs, damage to fencing, cost of water in times of drought and fluctuating export markets. For example, Australia is experiencing the COVID-19 outbreak and this has severely affected overseas demand for all animal and vegetable products

.SOLAR AS AN INCOME

So what options are available? What can a livestock farmer do to mitigate all these pressures? What about farming the sun? 

By farming the sun I mean installing a photovoltaic (solar) system on a percentage of their existing farming land as a means to guarantee an income flow.

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FARMING THE SUN

The advantages of farming the sun include:

• If there is a drought, it doesn’t affect the solar panels ability to produce
• If there is a flood, panels keeping making energy
• Unlike stock, a photovoltaic system doesn’t get sick, no vet bills
• System keeps on producing for minimum of 25 years
• Price of electricity historically increases

SOLAR: A CONSISTENT INCOME STREAM

In fact a solar system passively sits there, not complaining, producing energy every day with minimum maintenance which translates to a consistent income stream that, at worst, supplements existing livestock income.

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HOW IT WORKS

A solar system produces energy that has a value attached to it. If the energy is exported off site, i.e. flows to the grid it has one value. If it is utilised on site its value is to negate a certain percentage of energy drawn from the grid.

THE VALUE OF YOUR LAND

Let's say you have one hectare of land. Each m² slice of land has a value based on its purchase price and ability to generate an income.

According to a 2019 report the median price of a hectare of land in 2018 was $6770 in Victoria. The smaller the parcel of land the more expensive per hectare.

https://www.ruralbank.com.au/assets/responsive/pdf/publications/afv-vic-2019.pdf 

VALUE PER M 2

This equates to approximately $0.67/m² of land. Depending on the exact location, prices can vary from $1,329/hectare in Mildura to $17,000/hectare in Cardinia. Funnily enough the areas with more sun tend to be cheaper per hectare which is ideal for solar farming.

Let’s say that a farmer has 50 hectares of land running cattle and the stocking rate for 400 kg LWT steers is 7.5/hectare but he decides to allocate one hectare to accommodate a solar system

https://www.mla.com.au/extension-training-and-tools/tools-calculators/stocking-rate-calculator/ 

GROUND MOUNT SOLAR SYSTEMS: ENERGY DENSITY VICTORIA

That dedicated one hectare can fit a little over 500 kW worth of solar panels . 

See below for details:

• Panels used are 350 watt, 
• They have a 2000 mm x 1000mm footprint
• Panels tilted at 25.5° facing True North (for max output in Victoria)
• Space between panels is 4300 mm (minimum shading of panels)
• 154 panels per row, so 77 panels wide as there are two tiers
• There are 10 rows of panels
• Total width of array is 99.09 metres which includes 6 m East, 6 m West, 6 m centre
• Total Length North South is 95 metres including 10 m North 10 m South 

This assumes an access road down the centre of the array, N S and access road EW in addition to a perimeter access road. All-in-all, a fairly feasible scenario.

Now in Victoria for every 1 kW installed: 

• Output averages at 3.6 kWh/day 
• This 500 KW system will output, on average 500 x 3.6 = 1800 kWh/day
•  Equates to 657,000 kWh/year

This means that one m² of land can produce 65.7 kWh of electricity/year in Victoria (based on Nearmaps data: nearmap.com/au/en)

We have now attached a value of energy produced for each m² of your one hectare of land dedicated to solar and this energy keeps on producing day after day!

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WHAT INCOME IS GENERATED BY THE SOLAR

If you directly used all the output generated at $0.30/kWh (the price of a unit of electricity) this equates to an income stream of $19.71/m²/year.

If all the energy generated flowed back into the grid at $0.09/kWh this equates to an income stream of $5.10/m²/year.

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WORST CASE SCENARIO INCOME FLOW

So worst case scenario system produces:

• $5.10 x 10,000 (1 x hectare)  = $51,000/year
• Now if we assume dollar cost per watt for a 500 kW system is $1.60
• A 500 kW system costs  = $750,000
• 750,000/51,000 = 14.7 years to pay off the system
• System keeps on producing

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BEST CASE SCENARIO INCOME FLOW

• $19.71 x 10,000 = $164,000/year
• $750,000/197100 = 3.8 years
• System keeps on producing

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THE SPREADSHEET; VICTORIA

The spreadsheet below assumes an increase in electricity of 3% per year and shows various scenarios from 99% of solar production going to the loads all the way down to 1%.

Energy is calculated at $0.30/kWh imported from grid down to $0.09/kWh exported to the grid.

GROUND MOUNT SOLAR SYSTEMS: ENERGY DENSITY QUEENSLAND

If we had the same 500 kW system on one hectare in Brisbane, we could easily fit an additional 200 kW system. That is a 40% increase in capacity over the same hectare in Victoria. “Why?” You might ask...

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MORE SUN IN SUNNY QLD

This is due to the fact that row spacing (each solar panel row can’t shade the row behind) in Brisbane is less than what is required in Melbourne according to CEC (Clean Energy Council) recommendations. 

In addition the ideal tilt for max production reduces from 25.5 ° in Melbourne to 20.5 ° in Brisbane. In both locations I have allowed minimum row spacing plus a buffer of 20%.

In addition, due to the higher solar irradiation experienced in Brisbane, output will be better from the same sized system. This means that a m² in Brisbane, at the same dollar value for the land, will yield considerably more than in Melbourne. How much more?

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GROUND MOUNT SYSTEMS: ENERGY DENSITY BRISBANE

Now we will look at one hectare of land. Basically in Brisbane, Geebung RSL,  we can fit a little over 700 kW on one hectare of land. See below for details:

• Panels used are 350 watt, 2000 mm x 1000mm footprint
• Panels tilted at 20.5 ° facing True North (for max output)
• Space between panels is 2,261 mm, space between poles just over 6 metres
• 13 rows of panels, two tier, 154 panels per row, so 77 panels wide
• Total width of array is 99.09 metres which includes 6 m East, 6 m West, 6 m centre
• Total Length North South is 98 metres including 10 m North 10 m South 

This assumes an access road down the centre of the array, N S and access road EW in addition to a perimeter access road. All-in-all, a fairly feasible scenario.

VALUE PER M 2

For every 1 kW installed in Queensland, output averages at:

• 4.17 kWh/day this system will output 
• 700 x 4.17 = 2,921.87 kWh/day or 
• 1,066,165 kWh/year

This means that one m² of land can produce 106.6 kWh of electricity/year in Brisbane.

As with the Victorian example we have now attached a value of energy produced for each m² of your one hectare dedicated to solar and this energy keeps on producing day after day!

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WHAT INCOME IS GENERATED BY THE SOLAR?

If directly used at $0.30/kWh this equates to an income stream of $31.98/m2/year.

If put back into the grid at $0.09/kWh this equates to an income stream of $9.60/m2/year.

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WORST CASE SCENARIO INCOME FLOW

So worst case scenario the system produces:

• $9.60 x 10,000 = $96,000/year
• A 700 kW system costs = $1,120,000
• 1,050,000/96,000 = 10.9 years 

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BEST CASE SCENARIO INCOME FLOW

Best case scenario the system produces:

• $31.98 x 10,000 = $319,800/year
• $1,050,000/ 319,800= 3.28  years
• System keeps on producing
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THE SPREADSHEET; QUEENSLAND

The spreadsheet below assumes an increase in electricity of 3% per year and shows various scenarios from 99% of solar production going to the site loads all the way down  to 1%.

Energy is calculated at $0.30/kWh imported from grid down to $0.09/kWh exported to the grid.

FARMING LIVESTOCK AND SOLAR

The example we have given is a livestock farm producing steers at 400 kg and according to Meat and Livestock Australia which shows up to date pricing as  of March 24, 2020, the farmer is receiving:  

• 341 cents per kg LWT which equates to
• 7.5 (average stocking rate/hectare  x 400kg x $3.41
• Total gross of $10,230

The same applies to a sheep or goat producer. Now stocking rates vary based on the fertility of land which of course is associated with geographic location, fertilizer input, frequency of pasture rest periods and other factors.

https://www.mla.com.au/prices-markets/Trends-analysis/meat--livestock-weekly/

COST BENEFIT ANALYSIS

The farmer with substantial land holdings must off course do a cost benefit analysis and one approach is to calculate the exact value of each metre squared of land from a purely crop livestock perspective and then weigh that against the advantages of a steady income stream from the solar farm (albeit with a reduced canvas on which to grow crops an/or hold livestock). In addition the farmer may have large electrical loads of his own so a smaller ground mount system to address the site’s own consumption may be a viable option.

Unlike livestock and crop returns that will decrease based on the fertility and associated inputs that a farmer must include, a solar system doesn't care and its ability to to provide a steady predictable income is not impaired at all! In fact as long as there's sun you have an income and an income that has a predictability unlike any crop.

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EASIER FINANCE

This predictable income can enable a farmer to more easily approach their finance source, i.e banks, with confidence in regards to securing loans for future farm development, increasing livestock numbers or acquiring additional land holdings.

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CONCLUSION

Farming presents many obstacles and consistency of income is probably one of the most crucial factors affecting long term viability. Adopting a prudent approach to cost benefit analysis will allow farmers to make the best decision possible and incorporating a solar system into the farming mix is one of the best ways to buffer against the uncertainties of plant or animal based production.