UK farmers continue to endure sustained financial pressure on their businesses. In the year 2023-24, Farm Business Income (FBI) across all UK farm types declined sharply: cereal farms saw a 73% drop, general cropping fell by 24%, and dairy operations plummeted by 68% compared to the previous year. While forecasts for 2024/25 indicate some recovery, with cereal farm income projected to rise to £27,000 and dairy income to £176,000, these figures remain volatile.
And while on a national scale, total income from farming in 2024 reached £7.7 billion – up 26% from 2023 – overall crop output declined by 5.3%, driven by £600 million in losses in wheat and barley.
Similarly, in line with other productive sectors, inflation continues to impact farming businesses. Input costs for feed, fuel, and labour remain stubbornly high. A 2024 Investec survey revealed that 50% of farmers have faced a 10–15% increase in costs.
In isolation, these financial challenges continue to pile pressure on the sustainability of a number of UK farming businesses, but climate volatility compounds their economic woes. The driest spring in 70 years devastated yields in 2024, with 2025 already following similar patterns. Coupled with inheritance tax changes effective from April 2026, landowners and farmers are increasingly seeking additional and diversified income streams that crucially come without significant investment risk.
How solar and battery storage can offer under-pressure farms a lifeline.
For farmers looking to lease their land for solar and battery projects, the key benefits are as follows:
- Long-term, index-linked rent: Lease agreements typically span 25–40 years and include annual uplifts linked to inflation, providing stable, predictable income.
- High returns per acre: Standard rates range from £850 to £1,300/acre [A1] (~£2,100–£3,200/ha) annually; some landowners may also negotiate a small share of future project revenues.
- Low operational burden: Farmers can retain ownership, leasing only the surface rights. Farming (or grazing) can often continue under solar infrastructure.
- Mitigated risk: Fixed rental income shields landowners from price swings in produce, rising costs, and climate impacts that increasingly threaten farm profitability.
In addition to the above, solar and battery projects can also support farming businesses in mitigating wider inflationary costs, as index-linked rents keep pace with inflation. At the same time, long-term fixed rental income can provide a ready source of capital when planning for inheritance tax.
Additionally, apart from direct financial benefits, the biodiversity gains of solar projects on farmland can support increased pollinator presence, which helps to enhance crop yields from alternative produce, such as orchards, strawberry growing, or oilseed rape.
The direct financial benefits explained – example case studies
While the scale and type of farms can differ significantly across the UK, the following two hypothetical examples [A2] aim to give a real-world overview of the diversified income that farmers and landowners could secure through leasing their land for solar energy and battery storage.
Case Study 1: 50 MW Solar-Battery Project – South East England
- Location: South East England – e.g. Hampshire, Sussex or Kent
- Scale: 50 MW solar and 20 MW battery
- Land area: Approx. 120 acres (48 ha); typical intensity is 1 MW per 2.4 acres
- Lease terms:
- Rent at £1,000/acre
- 40-year lease with index-linked increases
- Bonus: 5% revenue share above the defined threshold
Financial snapshot
| Item | Amount (annual) |
| Base rent | £120,000 |
| Inflation uplift (2%) | +£2,400 |
| Revenue share (~5%) | ~£10,000 |
| Total income | ~£132,400 |
| Equivalent per ha | ~£2,760/ha |
In this scenario, a reliable annual income can be secured that can be reinvested in farm improvements, used to buffer lean years, and support passing the business on to the next generation.
Case Study 2: 25 MW Solar Project – North West England
- Location: North West (e.g. Lancashire or Cheshire)
- Scale: 25 MW solar farm
- Land area: ~60 acres (24 ha)
- Lease terms:
- £900/acre base rent
- 30-year lease, inflation-linked
- No revenue top-up in this model
Financial snapshot
– Base rent: £54,000 per year
– Annual rent per hectare: ~£2,250/ha
For many family-run livestock or mixed farms in the North West – where the average Farm Business Income is ~£28,000 – this rental agreement essentially doubles farm revenue, providing a meaningful cushion against fluctuating prices for produce or farming input costs.
What both case studies demonstrate is the consistent financial security that can be obtained by landowners and farmers leasing land for solar or solar and battery projects. Both farms are very different, but in each case, the contributions from renewable energy projects make a significant contribution to the financial income of the farm.
How to lease farmland for solar or batteries
For landowners and farmers considering leasing their land for solar energy, the following five steps should guide their initial approach.
- Assess land viability: Tools like ILOS LAND PLOT can help landowners model site suitability—providing data on land slope, grid proximity, environmental designations and capacity for solar.
- Engage credible developers: Look for established developers with existing UK portfolios that can offer clear, well-structured agreements.
- Legal & planning due diligence: Ensure complete clarity on lease terms, such as rights, break clauses, access, reinstatement and biodiversity requirements.
- Plan integration: Grazing under panels, biodiversity corridors, and community benefits can be part of an integrated farm-solar strategy, delivering wider ecological benefits to the farm.
- Holistic estate planning: Consult with financial advisors to ensure the fixed income from solar land leasing supports IHT planning.
Assessing your farm’s potential for solar
If, as a landowner or farmer, you are looking to explore renting land for a solar or battery project, then why not get ahead with assessing your farm’s potential with the ILOS LAND PLOTTER? This useful tool will enable you to determine if your land meets the key criteria in grid connection and positioning that renewable energy companies are looking for. And if you would like to speak to an ILOS land agent directly, then click through to our contacts page to arrange a call!