As the UK moves forward in its shift towards renewable energy, solar power has emerged as a crucial component in the journey towards a greener future. For landowners, getting involved in solar projects presents a chance to contribute to environmental objectives, enhance the value of their property, and reduce their carbon footprint, all while potentially securing significant revenue stream for the future. However, there are several factors to consider when looking at solar projects. This guide aims to provide landowners with the necessary information to understand and navigate the complexities of solar developments.
What You Need to Know About Solar Developments
Solar energy technology captures the sun’s power using photovoltaic (PV) panels, transforming sunlight into usable electricity. These installations can be placed on rooftops or on the ground in open areas. We have seen a number of large scale solar installations on land in Norfolk in recent years. With the UK’s commitment to cutting down on carbon emissions and the increasing cost of energy, solar power has become an appealing option both financially and environmentally for landowners.
Important Points for Landowners to Consider
Evaluating Your Property’s Suitability
Before starting a solar project, it’s essential to check if your land is suitable for solar development. Considerations for ground mounted systems include the land’s orientation and the amount of sunlight it receives, while rooftop installations need to consider the orientation, pitch and structure of the roof. A professional solar consultant or an interested solar provider can carry out a thorough assessment to determine the project’s potential benefits and any necessary modifications.
Large-scale solar installations are typically developer-led, so we recommend reaching out to a specialist surveyor, such as the co-author of this article, Chris Thyer, for expert advice on feasibility and potential opportunities and especially if you have been approached by solar developers offering terms. Chris highlights that landowners can explore the option of making controlled investments to initiate a project, such as applying for a grid connection before transitioning it to a solar developer for further advancement.
Securing a Grid Connection
With the exception of very small developments which produce power for your own needs, solar developments are almost entirely contingent on securing a grid connection to export surplus electricity and sell to the market. The National Grid have received such an overwhelming number of grid connection applications that their queue for new connections is, in some regions, now more than 10 years long. A grid reform is underway to help speed up the connection process, but early engagement is key to ensuring the viability of a project.
To retain control over a project, landowners can apply for grid connections themselves before taking their land to market, alternatively, developers can apply on behalf of the landowner, but thing carefully before selecting a developer as it may be difficult to back out once the process is underway.
Navigating the Planning and Permitting Process
Very small solar projects may benefit from permitted development rights which speed up the planning process, but large commercial projects will need approval from the local planning authority, or even the Secretary of State in the case of nationally significant projects. At a small scale landowners will need to navigate the planning process themselves. At a large scale, developers will apply for planning themselves, but landowners can add value to their land by undertaking some initial work themselves. The planning process involves:
- Early Engagement: Begin discussions with your local planning authority to understand any specific requirements or limitations. Applying for pre-application advice is a good way to obtain a formal response highlighting any issues to investigate further.
- Submission of Plans: Provide detailed plans and assessments, including the visual impact and potential effects on neighbouring properties including any screening or mitigation measures.
- Environmental Assessments: A significant number of studies will need to be conducted, including seasonal studies for bird nesting and over-wintering locations, examinations into the agricultural land grade for food production and assessments of the biodiversity along with a commitment to provide improved biodiversity as part of the development.
- Heritage Assessments: identifying the presence of, and mitigating the harm to any heritage features such as archaeology, listed buildings or protected landscapes.
- Approval Timeline: The approval process can take several months, so be prepared for possible delays. Solar providers may wish to establish an agreement in principle (via heads of terms and then usually an option) with the landowner before commencing this process.
Heads of Terms
While the upfront costs of solar installations can be substantial, large-scale projects are typically developer-led, as mentioned above. These developers will only invest significant time and money into a project once they are certain the landowner is committed to the project and has entered a contract over the land.
Initial negotiations focus on a heads of terms document which is a summary of the key commercial terms which will be written into the contract. We recommend consulting an experienced specialist surveyor, again, such as co-author Chris Thyer, for guidance on the terms offered, and engaging us for assistance in negotiating the terms. There are many pitfalls or opportunities to carefully navigate in the negotiations, so expert advice from an early start is vital in obtaining the most from the project.
Once agreed, the heads of terms will form the skeleton of the deal, around which your legal advisors will build the contract.
Addressing Legal and Contractual Matters
Engaging in a solar project involves various legal considerations:
Option and Lease Agreements:
- Exclusivity: A solar developer may seek a period of exclusivity from a landowner once heads of terms are settled pending settling of the terms of the option with the landowner.
- Option: A solar developer will often want an agreement in place such that it can ‘call’ for a lease to be granted in the event gridconnection and planning permission can both be achieved to their satisfaction. Prior to any option being entered into, the solar developer will likely want to carry out due diligence on the site.
- Lease Agreements: If you’re leasing the land for solar use, make sure the lease agreement clearly outlines the terms, including rent, maintenance duties and the lease’s duration.
- Access Rights: Solar installations often require access to the land for maintenance and potential expansion. Ensure that access rights are clearly defined and legally enforceable.
- Insurance and Liability: Consider insurance coverage for the solar panels and any potential liability issues related to their installation and operation.
- Secondary land uses: Do the terms/proposal allow for any other uses of the land (e.g. grazing of sheep)?
- Remediation: What responsibilities is the solar provider agreeing to take on regarding the removal of solar panels (and batteries, if applicable), and what security, if any, is being provided to ensure this?
Effects on the Environment and Interactions with the Community The development of solar projects offer global benefits of reduced carbon emissions and local improvements to biodiversity, yet it’s crucial to take into account and resolve any issues raised by the local community.
Look to work closely with the people living nearby and those involved in the project to tackle any worries and emphasise the advantages, such as the creation of jobs and the generation of clean energy. A commercial developer will lead on any community engagement on the landowner’s behalf, so it’s important to select a developer who you are confident will engage fairly with local residents and promote confidence in the scheme.
Looking Ahead to Solar Projects
The UK’s pledge to achieve net-zero carbon emissions, reaffirmed by Starmer’s pledge at COP29 to cut emissions by 81% by 2035 along with the improving efficiency of solar technology, leaves little doubt that solar developments will continue on an upwards trajectory for the foreseeable future. As solar projects become more common, landowners who welcome these developments can enjoy lower energy bills or attractive rents, and a beneficial impact on the environment.
For those thinking about developing land for solar projects, collaborating with seasoned professionals—such as lawyers, surveyors, solar advisors and financial specialists—is key to a seamless and successful shift to green energy. By considering the important points mentioned earlier, you can make choices that are in line with your financial aims and environmental goals. To sum up, solar projects present an attractive opportunity for landowners aiming to profit from the increasing need for renewable energy with long term lucrative deals available if managed carefully albeit with likely lengthy lead in times prior to the start of any lease.
Authors:
Howard Bailey – Spire Solicitors
Howard Bailey is a Partner within the Commercial Property Team. He’s been involved with all commercial property related matters, with a particular focus on property development. Howard also has a keen interest in energy projects, helping a number of landowners with such projects, and also leading the Green Team at Spire.
Chris Thyer – Bidwells
Chris is a Partner in the Energy and Renewables team at Bidwells. Over the last decade, he has advised landowners throughout the country across a range of renewable technologies – including onshore wind, solar, anaerobic digestion and biomass as well as complementary energy installations such as EV charging, micro-nuclear, battery storage and synchronous condensers.
