With many South West farmers looking to capitalise on the opportunities from renewable energy, Sonya Bedford from Stephens Scown looks at some of the key considerations you should make before rushing into an agreement for a solar park:
- Despite relatively tight timescales, don’t give into pressure and make sure you take proper professional advice before entering into a binding agreement.
- Be aware that some terms on offer are quite miserly – we’ve seen an option fee as low as £100 quoted. The commitment will be for a 25 – 50 year Lease (or possibly even an outright sale) and should not be entered into without proper remuneration.
- Bear in mind that it’s desirable not only to receive a simple rent under a Lease for your land, but also to obtain a share of the revenues from the sale of electricity generated on the site. You may also be able to negotiate an electricity supply for your own property, often for no cost.
- Be aware of any other development you might want to carry out on your land. Often leases and option agreements will include restrictions on developments adjacent to the site and which could have an effect on the performance of the solar PV arrays.
- Ask who will remove the equipment at the end of the lease and to what extent will it be removed at all?
- Seek professional advice about the potential tax implications. You may already have plans for mitigating Inheritance Tax, but granting an Option for a ‘solar park’ will impact on that, with reference to (where you are a farmer) the removal from agricultural use of some of your land.
- Consider the implications on any stewardship schemes you have in place – consent from Natural England will need to be obtained
- And if your land is mortgaged to a bank you will need to get consent to enter into long leases or sales.
Having said all this, there are exciting opportunities in the Westcountry where the solar resource is at its greatest and such opportunities should be seized, with a view to converting them into a 25 year income stream.
Sonya Bedford is Head of Renewable Energy at Stephens Scown. Visit www.stephens-scown.co.uk to download a specialist guide to solar energy for farmers or call 01392 210 700.