Converting part of their farm to solar farming was a no-brainer for Lance and Robyn Kerr.
The beef finishers are involved in two solar projects on their 704 hectare (641ha effective) farm near Glen Massey in northwest Waikato.
The first of these is a 6ha solar farm development and the other, a much larger 110ha solar farm.
The passive income derived from the two projects is greater than what they would receive from other land uses, Lance told farmers at a Beef+Lamb New Zealand field day that the couple hosted.
Work is already underway on the 6ha site with Trilect Solar using a specialised machine to drive in the foundation posts on which the solar panels will be mounted.
The second proposed farm will lease 110ha to Island Green Power.
Lance considers himself a contrarian and likes to do the opposite of what most people do.
“One of my philosophies is that if you do what you’ve done, you’ll get what you’ve got, and I’ve never been one to follow everybody else,” he said.
He realised there was money to be made in solar farming with companies wanting to lease land off farmers.
He did his own investigating and the first company that came up on Google when he searched for NZ solar farms was Trilect Solar.
He established a relationship with its director Andrew Beckett and over the course of three years it developed into a partnership where Beckett owns a 20% share in the 6ha farm, called Oakridge Solar.
The 6ha site is the farm’s least productive area from a grass growth perspective.
“It will now become the most productive block of land. It’s very exciting,” Lance said.
The venture was also the first solar farm that the Kerrs’ bank, Rabobank, had issued a loan for. Lance said the bank was happy to support it because it was viewed as an extension of the farm business.
“All they are looking at is return on their capital and whether you can service the debt.”
The projected returns were also very good.
“It’s far more than we are making off our beef operation and even what we were making off our dairy operation and with less input, so it was a no-brainer.”
The bank analysed its impact on their overall cashflow on the current business. It doubled net income and once the larger solar farm starts up, it will be tripled – for less work, he said.
Beckett said Oakridge will have around 6000 panels, 12 inverters to transform DC into AC and a transformer in an 18 tonne, 20 foot container.
It will also have weather stations and a web portal and smartphone app to allow them to see how much power is being made any time.
“In terms of energy production, it’s around 6000MW hours of energy a year, which is 6 million kilowatt hours. To put that into perspective, a typical Kiwi house uses about 25 kilowatt hours in a day.”
The process to install a solar farm is long. Aside from the resource consent process, a grid study needs to be completed to ensure that the farm can insert energy into the network without overloading it.
For this farm, 3.3MW is the limit before the lines are overloaded, he said.
Design and construction also take three to six months.
An ideal site for a solar farm includes suitable powerlines with a grid connection. The land must also be flat, he said.
Rather than selling the energy itself, Trilect partners with an energy retainer that sells it on its behalf to the wholesale market.
Another option is signing a long-term power purchase agreement with a retailer for a set period of years.
The 110ha solar farm is still in the planning stage, but the Kerrs plan to farm sheep under the panels with the finishing farm being unchanged.
The consent for the project was fast-tracked and approved through the Covid-19 Recovery Act and will generate 130MW when completed.
The land was previously used as part of a 170ha dairy farm, milking 1000 cows in a highly intensive System 5 operation.
However, Lance said, he had grown disillusioned with the industry. They were also concerned about the sustainability of their dairy operation, being an intensive system.
“It was a System 5 and I was sick of pouring nitrogen into our system and the amount of feed we used to feed those cows and I just got sick of it.”
“We haven’t regretted it – no way,” Robyn added.
They are getting older and saw it as an opportunity to earn passive income over the term of the 30-year lease and with succession looming.
“This is part of our passive income and what we are trying to do is simplify all of our systems and increase our cashflow.
“What Robyn and I really wanted to create was long-term longevity for our family,” he said.
