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Most of us are becoming used to seeing fields of wind turbines throughout the UK but one thing we are not used to in the north is seeing a field of solar panels. Anyone who has travelled to the south of England in recent years will have spotted numerous solar farms which increase in frequency the further south you go.
Although not famed for its long summers, the north is becoming the new target destination for solar development. Improvements in technology have made the panels more economic, while grid connections and suitable sites are becoming rarer. Developers are therefore pushing north with offers of up to £900 per acre for a 20-30 year lease.
Unfortunately, just as the door opens to northern farmers, the government decides to close it. On the 13th May 2014 the department of energy and climate change began a consultation on changes to financial support for solar farming. In this they propose to close funding to any solar development above 5MW in size (25-30acres of ground mounted panels) after 1st April 2015.
In contrast, they are looking to promote roof mounted installations by adjusting the digression of feed in tariff payments. In addition, they have proposed a 20 fold increase to permitted development rights to enable roof mounted installations of up to 1mw (8,000-10,000m2) without the need for full planning permission.
This consultation sets out clear and present benefits for business and industries but is restricting the potential for farmers, especially so for those who are only now realising the potential of their land.
At present, the sites of interest are:
Sub 5mw sites (25-30 acres)
These sites are the most attractive to developers and more so to local planning authorities. Financing will come from the feed in tariff scheme which is unaffected by the above changes.
Over 5mw Sites (30 acres +)
There is a flurry of activity as developers are running a nationwide call for sites in order to build out sites before the close out date. Once the renewable obligation certificate scheme is stopped, the more complicated Contracts For Difference (CFD’s) will be utilised. Developers need to be knowledgeable and experienced to progress large sites; therefore some may seek to reduce rents or abandon sites altogether.
Advice for Landowners
It is now or never for large scale solar development. Take the time to consider if you have any suitable land, it will need to be flat or south facing and ideally not crossed by any footpaths. Although most of the focus is currently on large sites of 30+ acres, some developers aren’t running the risk and are only looking for small sites of 5 acres or more before they are all taken up. Developers will undertake initial feasibility studies for no obligation and with rents of £900 an acre, landowners are advised to consider the suitability of their land for solar farming.
If you already have an agreement in place with a developer make sure that they are aware of these changes and have a plan to take the site forwards. If at any point the developer asks to change the rents or the terms, please do not hesitate to contact us and we can work with you to ensure that you are protected. We will recover our fees from the Developer so there is no reason to not be professionally represented.
GSC Grays have a database of reputable solar developers who operate throughout the UK and offer competitive rents. If you believe that you have land of interest, we will be happy to discuss working with you to promote the site and obtain offers. Going forwards we can then negotiate the most favourable terms and ensure that the development proceeds on target.
For further information, or if you have been approached by a developer or you are being asked to renegotiate existing agreement, please call Chris Thyer or Calum Gillhespy on 01748 829210.