Joanne Milne, Partner, Rural & Agriculture
We’ve spoken a lot about diversification in this column in the last couple of years, as many farming businesses have looked to open up new income streams in the light of the changes in the subsidies regime and rising costs across the board.
One of the things we’re increasingly seeing is approaches to farmers from renewable energy developers who want to use some of their land for solar energy schemes.
The short November days and cooling temperatures might make it seem somewhat illogical for anyone to want to locate a solar energy scheme in the North East, but the many queries we’re dealing with relate to land right across the region and there’s clearly an expectation among developers that they’re commercially viable in this part of the world.
Solar farms provide a dichotomy, both for farm businesses and the wider public. On the one hand, increasing the amount of energy that we produce via domestic renewables means is clearly essential, but on the other, so is maximising the amount of land we have available for domestic food production.
Whilst we have seen in the news that planning has recently been granted for two large solar sites in South East Northumberland, there’s currently a lack of clarity on what future government policy towards them is going to be.
The Truss government looked set to effectively ban solar farms in England by having a ‘presumption against’ them within the planning system, just as its predecessors had done with onshore wind farms a decade before, but the Sunak government’s view has yet to be set out.
There are a lot of things to consider if you’re approached by a solar energy developer, with the first and perhaps most crucial one being not to sign any contracts that you’re presented with before taking proper advice from your land agent and lawyer.
Developers are likely to want to secure exclusivity with you while they work to finalise their plans and obtain the required grid connections and planning permissions. For landowners, carefully checking the commercial terms that are being offered in return for use of their land is absolutely crucial.
Part of this should be ensuring that developers live up to the required planning regulations and environmental protections, with a financial bond being the appropriate way to cover this off.
While the land used for solar farms is unavailable for food production, that doesn’t mean that it can’t be used for anything else at all.
Many developers will commit to making biodiversity improvements during the lifespan of the project which will provide wider enhancements for the surrounding environments. Grazing sheep on the grassland around the panels can also be an option for the landowner.
Specifying what might be possible in this respect and what, given your knowledge of the area, you’d like to see happening should form part of your discussions.
There are also your relationships with people living in surrounding communities to consider, some of whom will be very supportive of solar farms and some of whom will be very much against – might any problems arising from this situation outweigh the financial benefits that you would get from siting the solar farm on your land?
You will also need to look outside the boundaries of your land, as the developer is likely to need to secure deals with other landowners for the energy infrastructure required to transport what’s produced at your solar farm.
Doing so may well impact on the timescales for the project realisation, and hence when you might start to receive your expected income.
Solar farms potentially provide a valuable new source of revenue for farm businesses, but as with any big project, it’s essential to ask lots of questions, lean on and listen to your professional advisors and make sure everything’s covered to your satisfaction before signing on the dotted line.
For further information on managing renewable energy scheme projects, or any other aspects of farming and rural business operations, please contact Joanne Milne on 0191 232 8345 or via firstname.lastname@example.org.