Norfolk agriculture cooperative: 1.1MWp ground-mount under asset finance

Project overview

A Norfolk agricultural cooperative serving 28 member farms across the NR area deployed a 1.1MWp ground-mount solar system on 1.8 hectares of under-utilised land adjacent to the cooperative's grain processing and storage facility. Financing was via a 7-year hire purchase asset finance arrangement, structured to align repayment cash flow with the cooperative's seasonal income pattern.

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The challenge

The cooperative had three structural constraints on capital purchase. First, working capital cycles tied to harvest season meant cash position varied by 40%+ across the year; locking up £820k in solar capex would have stressed the working capital facility. Second, the cooperative's member-distribution structure meant capex was politically difficult — members preferred predictable annual costs to large lumpy spending. Third, the seasonal grain operations meant electricity demand was highly variable; high in late summer/autumn (drying and processing), low in spring. Solar generation profile was poorly aligned with that demand pattern.

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Structure and economics

Hire purchase facility for £820k turnkey across 7 years at 6.6% APR. Monthly repayments of £12,400 — predictable, evenly distributed across the year, and absorbed in the cooperative's standard operating budget rather than lumpy capex. The cooperative claims the 50% First Year Allowance and 6% special-rate pool tax allowances on the underlying asset (HMRC permits this for HP because legal title transfers progressively). The export tariff revenue (significant given seasonal demand mismatch) was a key part of the case.

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How we got there

1. Step 1

   Q1: Site feasibility — ground-mount viability survey on the 1.8-hectare parcel. DNO connection study confirmed 1.5MW headroom on the existing 11kV connection. Planning consent secured (agricultural land within a permitted-use boundary).

2. Step 2

   Q2: Demand profile modelling — half-hourly data analysis across the cooperative's grain processing operations confirmed 35% direct self-consumption with the remaining generation flowing to export under SEG.

3. Step 3

   Q3: Asset finance lender selection — competitive process across four agricultural-specialist lenders. Selected lender on rate, structure flexibility, and prepayment terms.

4. Step 4

   Q4: Hire purchase contract execution. Construction commenced.

5. Step 5

   Year-2 Q1-Q2: Ground-mount installation, ground-screw foundations, fencing, and security. Full commissioning.

6. Step 6

   Year-2 Q3: Operations commenced. Monitoring portal live with cooperative-level visibility for member updates.

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Outcome

Year-one results: £132k of avoided electricity cost (35% direct self-consumption × ~24p/kWh × 1.1MWp × 1,030kWh/kWp/year) plus £66k of SEG export revenue (65% export × ~7.5p/kWh × generation × volume). Total saving £198k against £149k of HP repayments plus £8k of operating costs — net cash benefit £41k year one. Tax allowances added a further £67k of corporation tax saving in year one and ~£8k/year through the special-rate pool. Cumulative 25-year benefit projected at £2.7m versus £820k cumulative capex.

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What this case taught us

• Asset finance can work for agricultural cooperatives where capital purchase doesn't — the predictable monthly cash flow matches the operating budget structure better than lumpy capex.
• High-export projects need careful SEG tariff selection. The cooperative chose a market-linked SEG over fixed-price (8.2p effective vs 5.5p alternative) — material additional revenue over the project life.
• Ground-mount projects on agricultural land remain planning-sensitive but practical where the land is genuinely under-utilised. We worked with the local planning authority on a co-designed agricultural-led approach (sheep grazing under panels) that supported consent.