Solar panels and sustainable finance can help agribusiness weather the COVID-19 storm

Just as the bushfires were tamed and drought conditions in eastern Australia began to ease, along came coronavirus to add a further test for the already challenged agricultural sector. 

Although many Australian farmers have found COVID-19 to be less of a threat than enduring years with little or no rain, there are some causes for concern. The global downturn in economic activity appears unlikely to significantly reduce the demand for exports of essential foods, but there are some supply chain difficulties for both agricultural inputs and outputs, and prices for non-essential food products are softening. Meanwhile, non-food agricultural activity, such as cotton, wool and forestry, are likely to be impacted by the worldwide disruption in manufacturing and construction.

But there is a way to mitigate these risks – as well as strike a blow against the effects of climate change – by futureproofing your agribusiness with sustainable financing.

Sustainable financing funds resilience

The Clean Energy Finance Corporation (CEFC) is an Australian taxpayer-funded organisation which supports investment in low-emission agriculture and industry and renewable energy, financed by banks and other lenders. The CEFC have collaborated with the National Farmers’ Federation to produce a practical guide to lowering on-farm energy use and carbon emissions: Transforming Australian Agriculture With Clean Energy. Small-to-medium sized agricultural businesses can access more favourable finance terms for purchasing clean energy assets, as well as benefiting from energy cost savings, increased productivity and an enhanced reputation as a sustainable, climate-aware enterprise.  

Solar panels are a scalable, low-cost source of clean renewable energy

Harnessing energy from the sun using solar photovoltaic systems, better known as ‘solar panels’, now accounts for 5% of Australia’s electricity generation. Solar panels contain semiconductors (made of materials such as silicon) which use the photoelectric effect (the emission of electrons when electromagnetic radiation hits the silicon) to generate DC electricity. The DC electricity is then fed into an inverter to create AC electricity at the correct voltage. Any excess electricity not being used immediately on-site can either be fed into the grid to create income, or stored in a battery for later use. Systems are scalable, from small free-standing structures (e.g. for stock water pumping in a remote paddock) to a large unit (e.g. for irrigation pumping or intensive horticulture or animal management).

How agribusiness can benefit from solar panels

In addition to the advantages already listed – water pumping and intensive crop or animal care – solar panels offer the following benefits for farmers:

• Energy cost reduction
• Possible additional income
• Lower carbon emissions
• Practicality in remote locations
• Low maintenance costs (no moving parts)
• Possible improved cropping results using agrivoltaics

Accessing sustainable finance

Your finance broker understands the CEFC program as well as working with lenders offering discount terms for sustainable financing. Let us guide you through the loan application process so that your agribusiness can become more resilient in a world challenged by pandemics and climate change.  

Contact our team of Equipment Finance specialists at BOQF.DirectSales@boqfinance.com.au to find out how your business could benefit from the instant asset write-off scheme.

_{Finance provided by BOQ Equipment Finance Limited ABN 78 008 492 582 (BOQEF). BOQEF is a wholly owned subsidiary of Bank of Queensland Limited ABN 32 009 656 740 (BOQ). BOQ does not guarantee or otherwise support the obligations or performance of BOQEF or the products it offers. This blog post is for general information purposes only and is not intended as financial, taxation or professional advice. It has not been prepared with reference to the financial circumstances of any particular person or business and should not be relied on as such. You should seek your own independent financial, legal and taxation advice before making any decision about any action in relation to the material in this article.}