In recent years, many farmers and landowners have started selling or leasing their land for renewable energy projects. A shift is driven by the increasing demand for clean energy and the lucrative opportunities it presents.
By leasing or selling unused land for solar or wind energy projects and associated battery storage systems (BESS), landowners can diversify their income and contribute to a greener Britain. Find out more about the legalities that come with this, below.
What Are Farmland Renewables?
‘Farmland renewables’ refers to the use of agricultural land for generating renewable energy. Some popular methods include installing solar panels or wind turbines to harness natural resources like sunlight and wind to produce clean electricity.
Solar Energy - Solar farms involve large-scale installations of photovoltaic (PV) panels that capture sunlight and convert it into electricity. Mounted on frames for optimal sunlight exposure, these farms can range from a few to hundreds of acres, usually in rural areas with plenty of space and minimal shade.
Wind Energy - Wind farms involve multiple wind turbines being placed in areas with strong, consistent winds. These turbines convert wind energy into mechanical power and then into electricity.
How Is the UK Promoting Renewable Energy?
The UK Government is committed to achieving net-zero carbon emissions by 2050. Therefore, various incentives and funding programs have been introduced to achieve this, including grants for farmers to purchase solar panels for their own use.
As much of the land in the UK is flat, open farmland, there’s a prime opportunity for renewable energy. To reach the net-zero goal by 2050, the UK needs to significantly ramp up renewable energy production. This means that farmers will need to make their land available for solar and wind energy projects.
What Are The Benefits For Landowners?
Reliable Income - Leasing land for renewable energy projects usually provides landowners with regular rental payments. This can offer financial stability and help diversify income sources beyond traditional farming.
Environmental Impact - When taking part in renewable energy projects, landowners help reduce carbon emissions and support the UK’s transition to clean energy by reducing reliance on fossil fuels.
Better Use Of Land - Some renewable energy projects require little land to make a huge impact. Even small solar farms can generate a lot of energy and they can coexist alongside agricultural activities.
Reversible Investment - Solar and wind farms aren’t considered permanent infrastructure, meaning they can be easily decommissioned, and the land can be restored to its original state. This flexibility makes them a low-risk option for landowners.
Increased Land Value - Investing in renewable energy projects has the potential to increase the overall value of the land. Land with existing solar or wind farms may be deemed more valuable due to the steady income streams they generate.
What Should You Consider When Leasing or Selling Land for Renewables?
Choosing to sell or lease your land for renewable energy projects is no small decision, especially if the farm is your family legacy. You’ll need to weigh up various factors to make an informed choice. Here are some key things to consider:
Is Your Land Suitable?
Before leasing land for solar or wind farm projects, you need to assess whether your land is suitable.
For solar farms, flat land is ideal. If your land has uneven terrain, it may make construction more difficult and affect energy efficiency. Rocky ground and shallow topsoil can complicate the installation process. You’ll also need to consider the need for access roads for vehicles during construction and maintenance.
For both solar and wind energy projects, grid connection is essential. Proximity to existing power lines or substations is important. The closer your land is to these, the easier and cheaper it will be to connect to the grid.
Are There Any Planning Restrictions?
If your land is in a national park or Area of Outstanding Natural Beauty (AONB), planning permission for a solar or wind farm is unlikely to be granted. Be sure to check any local regulations and planning policies before proceeding.
You’ll also need to think about the visual impact of the project. Consider how visible the solar panels or wind turbines will be from public roads and residential areas. Highly visible projects are typically more challenging to get approved due to the increased scrutiny they attract.
Are There Any Renewable Energy Projects Nearby?
If there is already a solar or wind system on your property, adding another one may affect your eligibility for certain government incentives. Assess how additional projects might impact the existing installation and financial benefits.
Similarly, if there is another solar or wind farm nearby, this may reduce your chances of gaining permission to connect to the grid.
What Are The Legal Implications?
If you choose to lease your land, you’ll need to consider how long the lease will last and what terms you agree to. Solar farm leases often extend for 20 to 30 years, with potential renewal options. Make sure you understand the long-term commitments and conditions of the contract before proceeding.
You’ll also need to think about how leasing or selling will impact your finances and taxes. Leasing can provide a steady income while selling offers a lump sum. Both options can affect your tax situation, so it’s important to consult with a tax advisor.
Unlock Your Land’s Potential With Howells
Before you move forward with any decisions, we recommend seeking professional legal advice. An experienced conveyancing solicitor can guide you through the complexities of option agreements, lease agreements, planning permission, and financial impacts to help you make the right choice for you and your land.
If you’re considering leasing or selling land for a solar farm or other renewable energy project, get in touch with us today. Our team of multi-award-winning conveyancing solicitors is here to provide guidance and support to navigate the process smoothly.
