Many of us are looking at ways to be more energy and self-sufficient, and in an industrial setting the savings from renewable energy sources can be substantial.

With limited space in an industrial yard, more often than not the most attractive source of renewable energy is solar panels, which can easily be installed on the roof of a portal steel frame building on-site.  Whilst the physical installation of the solar panels is straightforward these days, there are several legal and practical issues to think about in relation to the ongoing presence of the solar panels on your building:-

1)  To Buy or lease?

If you do not have the capital available in terms of reserves and/or finance availability, then purchasing solar panels outright can be unachievable initially.  An alternative might be to grant a lease of the airspace above your building to a solar panel supplier, who then puts the panels on the roof. You need to think about whether you will require the permission of any third party to the installation of new equipment on the roof.  Whilst the supplier will ordinarily deal with any planning and building regulation issues, if you have a mortgage over your building you will need to consult with your mortgage lender to obtain their consent to the panels being installed. If you only lease the building, you will need to speak to your landlord.

2)  Cables

Some part of the equipment for the solar panels is likely to need an electricity supply, but in any case, you will need a cable run to transfer power generated to the grid.  Consider where these cables will run: will they be over your own land, or will you need the permission of a third party to go over other land before they reach a grid connection. Practically speaking, you also need to think about where the cables will run if you intend to redevelop your property at some point in the future, so these are not built over.

3)  Who will own the energy generated?

The energy generated is usually sold under a long-term supply agreement between two parties called a power purchase agreement (PPA).  The PPA will set out details such as  the amount of electricity to be generated/supplied; the price per unit; the rights and responsibilities of each party, and compliance issues.

Always make sure you consult with appropriate legal and valuation experts on any potential impact on your business of the installation of renewable equipment.

We have a broad range of expertise within the firm in relation to all aspects of this type of transaction; please do not hesitate to contact Claire Ramsden claire.ramsden@andrewjackson.co.uk for leases and property issues, and Susie Mortonson susie.mortonson@andrewjackson.co.uk for PPAs.