A landowners guide to letting land for renewable energy

Matthew Wilcox BSc (Hons) MRICS, Professional Partner, Rural Surveyor, and RICS Registered Valuer, looks at renting your land for renewable energy, and lists some top tips.

You are looking through the day’s post and within the usual utility bills and flyers is a letter from a company you have never heard of, offering you “How much!?” per acre to rent your land for renewable energy. This pays way better than farming… where do I sign?

For many landowners, this letter can feel like a godsend but also includes terminology which they have never come across. Stags has assisted landowners with a range of renewable energy technologies. In the last two years alone, we have negotiated terms for a range of schemes including solar, battery and associated technologies with a total annual rent equating to just under £1,000,000.

Based on our experience, we would therefore offer the following top tips to landowners:

1. Don’t sign any letter until your land agent or solicitor has checked it.

We often come across situations where landowners have unknowingly signed a letter allowing a developer to apply for a grid connection on their land which can cause issues later down the line.

2. Engage with a land agent with renewable energy experience early on.

Your land agent will not only be able to advise you on the commercial aspects of any potential agreement but can also consider any practical implications, such as how any lease may work alongside any retained farm or business.

3. Don’t decide to go ahead with the first developer who contacts you.

It is worth doing background checks on the developer to understand how it is backed and the number of schemes they have built etc.

4. Don’t worry about fees.

Your professional fees may often be covered by the developer and so don’t be afraid to get good professional advice. The lease agreements involved are often over 30 years and so it’s important to get this right.

5. Consider the tax implications.

If the grid connection enquiries come back positive and heads of terms are nearly agreed, it is prudent to get tax advice from your accountant on how the potential tax implications may be managed.