In one of our earlier articles in this series, we discussed the issues to be considered when considering installing solar panels on a roof of an existing building at your premises.  However, your energy needs and the scale of your site may justify you installing other energy producing equipment such as a gas generator and/or your own wind turbine.

We have previously focused on property issues in relation to installing equipment of this nature, and the legal rights and interests it creates.  In this article we discuss in more detail the issue of power purchase agreements (PPAs) which may need to be entered into concerning energy produced by the equipment.

As with solar panels, the initial capital outlay to purchase equipment of this nature outright is quite often prohibitive from a cashflow point of view. It is therefore often the case that specialist suppliers will agree to install equipment on your site in exchange for the grant of a lease of the area where the equipment will be situated, together with a power purchase agreement governing the rights and obligations in respect of the energy generated by the equipment.

As with other green installations on site, the initial primary driver is to obtain sufficient energy production to serve your own needs on site.  However, as the equipment becomes more sophisticated, it is often the case that excess energy will be produced that can be sold off site to the grid for an income.

A PPA provides details about energy production and supply, the respective rights of the land owner, and the equipment owner in the energy produced. It also contains safety and regulatory information, and many of its terms overlap with property rights in the site.

It is equally as important to ensure that both the property rights governing the presence and use of the equipment on site, and the power purchase agreement terms are considered fully and it is crucial that any interrelated provisions in both these documents work together.  It is vital you retain suitable legal professionals to negotiate both documents to ensure that the provisions of each agreement do not contradict or disapply the provisions of the other.

Our friendly team can advise and assist with both types of documents, together with all other renewables associated points.

Please contact Claire Ramsden at claire.ramsden@andrewjackson.co.uk or Susie Mortonson at susie.mortonson@andrewjackson.co.uk