Published
September 30, 2026
Diversification has become an important part of many farm businesses. Whether it involves letting buildings, developing tourism, adding food processing or establishing a new agricultural enterprise, diversification can create additional income while making better use of existing resources.
In England, 72% of farm businesses had some form of diversified activity in 2024/25. Letting out buildings was the most common, while generating solar energy was the second most common activity, undertaken by 27% of farm businesses.
However, starting a new venture can also change the farm’s energy requirements:
- A farm shop needs lighting and refrigeration
- Holiday accommodation needs heating and hot water
- Processing facilities can require significant electricity for machinery and cooling
Planning how that additional demand will be met should be included in a farm’s wider diversification plans.
Why Diversification is Becoming More Important for UK Farms
Farming businesses operate in an environment where controlling costs and developing sustainable sources of income are increasingly important considerations. The Government’s Farming Profitability Review 2025 highlighted rising fixed costs as a significant challenge for farms, including higher energy costs.
Diversification can provide another source of income alongside core agricultural activities and the type of opportunity will depend on the farm type, its location and the resources already available.
Existing buildings could be adapted for commercial use, while suitable properties may offer opportunities for holiday accommodation or farm-based retail. Other businesses may look towards food processing or developing new agricultural enterprises.
Whatever the opportunity, diversification usually involves investment. Understanding the operating costs of a new venture is therefore just as important as establishing its potential income.
The Hidden Energy Challenge of Diversification
A building that currently has limited electricity use could require considerably more when diversified. Similarly, introducing refrigeration or processing equipment can change the farm’s overall energy profile.
This additional demand can increase reliance on electricity from the grid, making energy costs an important part of the financial planning for the new business.
Some agricultural activities also have particularly high electricity requirements during periods when solar generation is strongest. For example, harvesting and crop drying can coincide with the months when solar PV produces the most electricity.
Considering energy alongside the diversification plan can therefore help farmers understand the likely running costs before committing to an investment.
How On-Farm Energy Generation Can Support Growth
Generating electricity on the farm can help meet some of this additional demand directly. For a farm expanding its electricity use, this can help limit the impact of higher energy consumption on operating costs.
In order to do so, a system needs to be designed around the farm’s existing consumption, available roof or land space and the expected demand from the new venture.
This is why energy planning should happen alongside diversification planning. If a farmer knows that a new venture is likely to increase electricity demand, that information can be considered when assessing the appropriate solar PV solution.
Making Better Use of Existing Farm Assets
Diversification often starts with looking at what a farm already has; both land and infrastructure can potentially contribute to a new business venture. The same principle can apply to energy generation.
Farm buildings with suitable roof space can provide an opportunity to generate electricity without requiring additional land. In 2024/25, 89% of farms in England generating solar power had panels installed on farm building rooftops.
Where appropriate, ground-mounted solar can also be considered. The right option will depend on the site, planning requirements and how the land or buildings are currently used.
There is also evidence that farmers are already considering solar as more than a standalone investment. Of farms in England that had installed solar in 2024/25, 76% said reducing energy bills was a reason for installation, while 41% cited reducing the impact of future energy price changes.
This makes on-farm generation relevant to diversification because its value comes from the electricity produced helping support the farm business itself.
Planning Energy Strategy Alongside Diversification
Start by understanding current electricity consumption and identifying where demand is likely to increase. A new venture may have very different operating hours from the existing farm business, so understanding when electricity will be used is important when assessing the potential value of on-site generation.
It is also worth considering how the energy strategy could develop over time. A diversification project may begin on a relatively small scale but expand as demand grows. Designing an energy system with future requirements in mind can help avoid treating each increase in demand as a separate problem.
Supporting the Next Stage of the Farm Business
Diversification is ultimately about finding ways for a farm business to develop. Energy generation can support that process by helping farms meet additional electricity demand without relying entirely on external supply.
For farmers considering a new venture, the question is whether an energy strategy can be designed around the farm’s existing operations and its plans for the future. By considering energy requirements at the same time as the diversification opportunity, farmers can build a clearer picture of the investment required and the potential long-term operating costs.
At Noble Green Energy, we work with agricultural businesses to develop solar PV systems around their energy requirements, using available roof space or land where appropriate. As part of the Noble Foods Group, we combine renewable energy expertise with a strong understanding of the agricultural sector. Contact us today to find out more.
