Solar farm agreements explained
Burnetts' Head of Agribusiness and Property, Richard Miller explains solar farm agreements.
Over the last 12 months, many farmers have found themselves being actively canvassed by solar farm developers looking to secure locations for solar farm installations.
The prospect of additional income will always be welcomed by landowners, but many are signing contracts with installers without taking legal advice or talking through the issues with their land agent.
The standard form of arrangement offered to landowners usually involves the following:
Exclusivity agreement - where the developer will be able to make initial investigations about the viability of the site, safe in the knowledge that, for a limited period of time, the property owner cannot deal with a competitor or explore other diversification options;
Option agreement – assuming the site is deemed suitable, the developer will want an option agreement specifying a period whereby they can apply for planning permission for the installations; and
Lease – assuming planning permission is granted, the developer can then choose to secure a lease over the property giving the landowner an annual rent in return for allowing the equipment to be installed.
These agreements can affect the farm business for many years, so, as with any legal document, it’s essential to take specialist legal advice.
About the author
Richard is a Partner and Head of Burnetts’ Property team.
Published: Wednesday 11th February 2015