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Considering renewable energy on your land?
28 May 2024

With the continued focus on climate change and meeting net zero targets, there remains strong interest from developers looking for land for renewable energy projects. A letter through the door from a speculative developer, with proposed terms for a battery or solar project, is now common for a lot of landowners.

At Robinson & Hall, we have renewable projects at all phases of development, from early discussions with developers on behalf of clients, to schemes in construction, to completed projects. We provide advice to landowners from the outset of a scheme, through the negotiation of the heads of terms and on to the signing of the lease and option. Where construction of a project is completed, we also assist landowners with checking the rent payments received as these can be complex where they are based on the income from a site.

One project we recently worked on was a 100 acre solar project in Central Bedfordshire. The site comprised arable land, let on an Agricultural Holdings Act 1986 tenancy, close to a Grade I listed church and with a high voltage over head cable and underground gas main crossing the property. On first look, the project looked to have little potential, but the landowners agreed to a 6-month exclusivity period with the developer, agreeing not to speak with any other developers whilst the developer looked into grid connection and scheme feasibility.

During this time, the developer secured a grid connection and designed a scheme, leaving an area of arable land close to the church undeveloped to provide screening for the listed building. We progressed negotiation of heads of terms which included the key terms for the option and subsequent lease. We also negotiated with the agricultural tenant and agreed the compensation which would be payable if a planning consent was successfully achieved for the solar project. It was important to agree the compensation at an early stage to ensure the tenant was on board with the scheme and would provide vacant possession of the land at such time as the developer needed to start construction.

Once the heads of terms were agreed, the developer’s solicitor drafted the option agreement and lease which we and our clients’ solicitor reviewed before being signed by both parties.

Following signing of the option in September 2021, the developer secured planning consent and served the option notice. The lease was entered into in June 2023 and construction works are now ongoing on site. The rent received is 10 x higher than that received previously from the agricultural tenant with annual index linked increases. Our fees, and those of landowners’ solicitor, were covered in full by the developer, meaning the landowners incurred no cost during the project.

As well as solar projects, we have had significant interest from developers looking for sites for battery storage. As a developing technology, battery storage is being looked at as a way of storing energy produced by renewable projects so that it can be used at peak times and further reduce our reliance on fossil fuels. Battery sites can either come as part of a solar project or as a standalone site. As with solar, a grid connection is vital, but the land needed is much smaller than for a solar project.

We have in recent months seen a renewal in interest for sites for onshore wind. This follows the Prime Minister’s easing of the virtual ban on onshore wind sites, which was brought in by David Cameron in 2015. Whilst planning is still restrictive, with the Government focusing still on offshore projects, developers are sensing there may be a change of policy and are looking again at sites which were being considered prior to 2015. The surveys required for wind projects take a number of years and therefore developers are looking to get ahead of any policy change by having the surveys completed and sites ready to proceed.

When weighing up whether to pursue a renewable energy project, it is important to take advice at an early stage. The negotiation of the heads of terms is key as those are the terms on which the option and lease will be based. It is also important to consider which land should be included and the tax consequences of any change of use.

For further information please contact Polly or Andrew.

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