With the UK government legally committed to meeting 15% of the country’s energy demand from renewable sources by 2020 there is currently an opportunity for landowners to look into creating solar farms. As with any change of use with land, expert advice should be sought to ensure that any regulations are adhered to and that profits are maximised.

Robert Paul, a partner in Land Management at Strutt & Parker’s Shrewsbury office, has collated a useful list of key issues when considering a Solar Farm:-

• Solar farm developers are pushing northwards in a scramble for sites.  With good connection being the key issue, the south (and southwest particularly) have reached saturation point.
• Developers are generally looking for 30 acres or more and will install panels at an average rate of 5.5 acres per megawatt of capacity.
• The market is divided by developers who aim for long term retention of a scheme and those who obtain planning or build out and then sell on to investors.
• Developers generally want to push three elements of their scheme whilst avoiding incoming costs at all times.  The three elements are grid connection, planning and the terms of the deal.
• On the latter point, landowners should take advice.  Developers may well attempt to agree terms without committing to meeting costs until they have absolute clarity and positive confirmation in respect of the other two main legs being planning and grid connection.
• Landowners therefore need to get confirmation at a very early stage that all costs incurred in entertaining the developer’s proposal will be met by the developer irrespective of whether or not the matter proceeds to legal completion. 
• Exclusivity agreements are to be avoided wherever possible until full Heads of Terms have been agreed.  Otherwise landowners can find themselves trying to negotiate but with both hands “tied behind their backs”.
• Rents for solar farm schemes should be in excess of £1,000.00 per acre per annum for a 25 year lease (no extension and no rights to renewal). Better still, a percentage of turnover should be paid as rent because energy values and the value of the Renewable Obligation Certificate (subsidy) is very likely to outstrip inflationary increases applied to a fixed rate per acre.

Robert Paul adds “One of the most important aspects to be agreed is reinstatement which cannot simply be left to the good will of the developer in the final years of the lease.   The company could easily be dissolved leaving the landowner exposed to the liability of having to reinstate and dispose of panels and cabling etc. Of course, speed is key in dealing with such matters and at Strutt & Parker we have the expertise and ability to assist.”