Solar energy in the agricultural sector

Posted 24/06/2013

According to a recent update published by the Department of Energy and Climate Change (DECC) on the Renewable Energy Roadmap 2011, the UK is making good progress towards meeting its target of 15% renewable energy by 2020. Large scale solar projects in the UK are now said to generate £13 million worth of electricity each year with agricultural installations accounting for around 7%.  With demand for solar PV coming from both Feed in Tariff and ROC incentivised schemes and the level of subsidies changing again at the end of March 2014, at Ashtons Legal we are seeing an increase in matters relating to solar energy in the agricultural sector from landowners, operators and funders.

Whether you are looking to grant a lease for ground mounted or building mounted solar PV arrays, enter into a joint venture or supply and install projects there are several key factors which you need to consider and taking good legal advice is a must.

Some of the main issues, which we come across when dealing with solar projects are as follows:

Are you familiar with the title to the property? Are there any restrictions which could prevent the project from going ahead?Consider how to structure the deal.  Since the operations on the land may change from a trading to an investment operation, the effect on the availability of inheritance tax reliefs may be significant.Consider different rent options.  You could consider a guaranteed rent which increases in line with inflation or alternatively a percentage of the income from electricity generated, or a mixture of both.Consider what land is being made available and how much the developer is likely to take once planning is obtained.  You will need to ensure that the developer is obliged to take a lease of a minimum number of acres and in a single block otherwise it may not be practical or cost effective for you to grant the lease in any event.The developer will require restrictions on what you can do with nearby land in order to ensure their development is not effected by operations on adjoining land. Ensure you are aware of the extent of these restrictions and the extent of the land which is subject to these restrictions.Will the development be near to a suitable grid connection and what are the cost implications?Will wayleave agreements be required e.g. between a landowner and network operator as to the required cabling.Consider what happens with the panels at the end of the term.  There could be significant costs to take down the panels and reinstate the land to viable agricultural land.  The developer may not have any incentive to pay any cost to taking down the panels.  Therefore consider the developer providing a  bond or guarantee which can be used for reinstating your property.
If you are considering solar power or any other forms of renewable energy please contact Simon Cunningham on 01603 703085 or email him at simon.cunningham@ashtonslegal.co.uk. Alternatively complete one of our enquiry forms.