A lot has changed in the world of renewable energy over the last decade or so. There is increased concern about the impact of climate change and the government has a renewed commitment to net zero. Solar PV technology has advanced, costs have fallen and connection capacity for large solar projects is becoming available. This has resulted in many more farmers being approached by developers looking for large sites (over 100 acres) on which to site ‘utility scale’ solar schemes capable of producing up to 50MW.
Where previous planning applications might have failed, there are several recent examples of solar projects successfully securing planning permission on appeal, including one in the green belt and two on prime agricultural land. Although each decision turned on its own particular facts, there is no doubt that there are opportunities for farmers and landowners to consider a solar farm development as part of a diversification programme. Nonetheless, as with any significant change of land use, any such agreement must be negotiated and drafted with care.
What has changed?
The original 2011 National Policy Statement for Renewable Energy Infrastructure (EN-3) did not specifically refer to solar generation because the technology was not sufficiently advanced for solar sites to qualify as ‘nationally significant infrastructure projects’ (NSIPs) producing 50MW plus generating capacity. That has now changed with solar capacity expected to increase from its current 14GW capacity to 70GW by 2035 and 90GW by 2050. This significantly increased target means that many more large-scale solar farms have to be approved with the result that previous barriers to gaining planning approval have been lowered, including access to the grid and quality of agricultural land.
What constitutes a suitable site?
Although you may have considered installing a small solar development for your immediate / local needs, developing a reasonably-sized site is likely to be financially prohibitive and technically difficult. The alternative is to consider leasing (or selling land) to a solar farm developer who will be looking for the following:
- Size: a minimum of ten acres (thirty plus acres on average) and up to 200 acres for a utility scale site. The bigger the site, the more energy produced.
- Type of land: fairly flat, well-drained with minimal or no flooding risk, no significant shading (trees or buildings), and room for associated infrastructure (switching gear etc)
- Access to the grid: the nearer the grid, the less expensive the connection requirements. Road access is also important for both the construction phase and maintenance thereafter.
- Planning permission: sites generating less than 50MW need planning permission from the local authority; sites generating more than 50MW are NSIPs and need permission from the Secretary of State. It is the developer’s responsibility to apply for planning and the associated costs.
What about planning?
Local plans, guided by the National Planning Policy Framework provide the basis for LPA decisions and should support renewable energy schemes and, judging by the success of recent appeals, planning inspectors certainly seem to be taking a more flexible attitude on what is, and what is not, acceptable. In weighing up the impact of solar farms on good quality farmland, amenity value, or on the wider landscape, the attraction of low carbon energy generation appears to be winning the day (although land within an AONB, national park, or SSSI is unlikely to be approved). The timescale for achieving planning permission can be considerable and both parties have to be prepared to go through the appeal process. Planning obligations are almost certainly likely to be part of any approval so these should be considered in advance.
Considerations for landowners
As the landowner you may have several things to consider: loss of crops, restrictive covenants, third-party rights (such as mineral extraction, or shooting rights), rights of way, and easements for cabling will all feed into any decision. Nonetheless, the long term physical effect of a solar farm on your land should be negligible; indeed, it provides an opportunity for soil regeneration and an increase in biodiversity, particularly if animals are grazed on the site, as well as providing a regular income for the duration of the lease.
The key message is not to rush into any agreement without taking professional advice. These are commercial agreements and no developer will willingly commit to costs until planning permission has been secured. Most negotiations proceed on a staged basis:
- Option agreement: the developer will agree an ‘option’ on the land for a specified period during which planning permission will be sought. As the landowner, you will be expected (unsurprisingly) to support any planning application but the developer should bear the financial responsibility for the planning process. The developer may also want to impose conditions that prevent you from carrying out certain activities that may impede the development.
- Agreeing the lease: improvements to solar technology mean that leases can be for up to 40 years so it is critical that any agreement is carefully scrutinised. Developers are likely to want to restrict what you can do in the immediate vicinity of the site – building or growing anything that might overshadow the panels will not be acceptable. You need to ensure you are properly compensated for the use of any additional land leased for associated infrastructure and clarify any maintenance obligations, e.g., stock-proof fencing. You also need to think about break clauses and what happens if the developer decides the scheme is not financially viable.
- Restoration: you must consider what happens at the end of the lease – restoration obligations ensure the developer is responsible for dismantling the site and making good. However, if you have granted a 40 year lease, you need to protect against the possibility of developer insolvency or otherwise defaulting.
The number of solar farm developers is proliferating given the ‘urgent need for new low carbon energy infrastructure’ [House of Commons Library, 18 July 2023] and the race is on for suitable sites. According to various sources, developers will pay in the region of £1000 per acre which is an attractive extra income stream, particularly for less-productive land. Although the investment required to get a site from bare land to fully constructed solar farm lies with the developer, it is imperative that you protect your interests from the start so seeking professional advice from the outset is highly recommended.
