Over the past few years as regards renewable energy, and in particular most recently in relation to solar energy, many farmers have found themselves being actively canvassed by wind farm and solar farm developers looking to secure locations for their equipment on their lands.
Here are top ten tips to bear in mind to help you before you put any pen to paper:-
- Do your research. Know that an Option Agreement is one of the most onerous documents that you can sign. It has the potential to affect your land for 25 to 35 years.
- Consider the practicalities. Attention must be given to implications for the rest of the farm and your family. How will access roads and construction affect your farming business and daily life? Is the proposed development near your family home? How will it affect the layout of your farm? Will fences and gates have to be changed? What are your future plans for the land?
- Examine the payment clauses closely. The Option and Lease Agreements are complex legal documents. The way in which payment is calculated can often be difficult to interpret and subject to finer details contained in small print.
- Negotiate, negotiate, negotiate! It is up to you to negotiate terms that suit you and ensure that you are fairly compensated for the risk and onerous terms. Developers tend to have their own standard Option and Lease Agreements. This does not mean that you have to accept the terms in the draft Agreement. It is a starting point. My standard advice to landowners is to sign no documentation however informal it looks before taking independent advice.
- Find out all you can about the company you are dealing with before you sign anything. What is their experience? Are they solvent? How do they access funding? Do they have a proven track record elsewhere in Europe?
- Consult with your Teagasc advisor. Will you lose entitlements, if so how many? Entitlements could be affected by the installation of turbines and solar panels on your land. You need to speak with professionals in advance of signing to ensure you enter into such an agreement with all the facts.
- Consider how the equipment will be taken down at the end of the lease. Who will pay for this? A common fear of farmers is that when the lease comes to an end, they will be stuck with turbines or solar installations on their land. Seek a bond to be put in place as coverage should the developer fail to remove equipment or if he cannot afford to clean up the area or reinstate the land, once the lease expires.
- Instruct a specialist solicitor experienced in this particular area. This a niche area of law. Seek advice from a solicitor with experience in advising farmers in relation to these renewable energy matters, preferably someone who knows about the wind electricity business, solar business and the agricultural business. The developer discharges your legal fees so ensure that you obtain the best advice.
- Ensure the developer does not have a right to renew the lease automatically. Many of the agreements contain this unfair clause.
- Take your time. This is a topic that I am very passionate about. Read the small print and instruct a solicitor who is experienced with dealing with these types of renewable energy agreements. You need to sit back and really think and ask yourself “have I thought about X, Y and Z?” with the aim of bringing the matter to a successful conclusion. I am not against these types of agreements at all. I am, however, against not having the right agreement in place.