News & Events
It is estimated there are currently just under 500 solar farms operating in the UK providing clean energy to the Grid and solar capacity is increasing fast. Solar schemes can be installed on marginal agriculture lands and supply an additional source of revenue for the farm. This alternative revenue stream can offset operating expenses of the farm and provide economic resilience in poorer growing years. Solar schemes do not need to be installed on the better or projected growing parts of the holding.
However, you may have seen research indicating that the majority of farmers not currently involved in solar projects or other renewable energy generation who were surveyed see high investment costs as the major deterrent.
The benefit of a developer constructing a scheme is that it takes on the investment risk and the farmer enjoys a long term income stream.
The financial terms which the developer is offering may look attractive. However whenever we are contacted by a farmer we always recommend that he or she instructs an independent land agent to give expert advice on the commercial terms.
The financial aspects will be the incentive for the farmer to progress the developer’s scheme, but there are always elements of downside. These risks and exposure need to be considered and addressed during the legal process – in the negotiations on the terms of the exclusivity agreement, option and lease. The developer will be seeking to secure its interests over the long term; the scheme could affect the farm for as much as 40 years. It will want to ensure that any documentation minimises negative impact caused by ongoing farming operations and its liabilities to the farmer for costs and losses incurred.
During the initial construction process the land and farming activities will be disrupted. Once the plant (solar panels and battery energy storage system, for example) and infrastructure are constructed, your farming activities will need to be managed around it and there may be obligations to contribute towards the maintenance of access ways and services.
Remember, there is not just the issue of the physical impact on the landholding but also the constraints which a developer may seek to impose. Those constraints may include restrictions on farming activities and land management but also prohibitions on future development and occupation. You need to be sure that you are comfortable with the negatives and that the positives are in the ascendant.
You will need independent advice from a land agent and your lawyer to guide you through the discussions and negotiations with the developer. This will ensure that the downside is minimised and you secure as much protection as is reasonably obtainable for the long term.
Any reasonable developer will be prepared to discuss and negotiate on issues of concern: you need to end up in a position where any document you are asked to sign is in a form that contains provisions with which you are fully familiar, is not unreasonably restrictive or onerous and does not unfairly prejudice you and your family’s interests in your landholding.