Solar photo voltaics (PV) is one of a number of renewable technologies which will help us meet our renewable electricity targets of 40% renewable electricity by 2020.
There is widespread expectation within industry that a renewable energy feed-in tariff (REFIT) will soon be announced by the Government to support the development of large-scale (5MW) solar projects. This has led to what can only be described as a feeding frenzy among solar PV project developers, who are pursuing suitable sites of 10-12ha (25-30 acres). These are ideally within a short distance of a grid-connected sub-station. At present, there is no subsidy or support available for PV. Developers will have to consider whether sufficient subsidy will be available when bringing forward projects.
Read also Energy sector at a crossroads: Tom Bruton warns expectations of a solar tariff in the near future may be misplaced.
Farmers need to be cautious in signing any exclusivity deals with potential developers and they should only do so if the terms are beneficial. In most situations an exclusivity agreement is not legally binding unless a letter of intent or memorandum of understanding has been included.
Lease agreements
Options and lease agreements should provide as much protection as possible for farmers. No developer in their right mind will seek an option agreement for any period less than five years. Some developers are offering exclusivity agreements or letters of comfort to farmers for perhaps a one year period. Furnishing a letter like this will not cost the developer anything. They are short one to two page letters with no legal advice on either side.
They do not indicate any commitment from the developer that they mean business and they do not demonstrate that the developer has the technical knowledge to complete such a project. It would be extremely risky to rely on planning authorities or ESB networks on grid connection to give a turnaround decision within one year.
This exposes the promoter to a very serious risk at the end of a one year period in that the land owner may be no longer agreeable to proceed while the developer may be carrying very substantial fees and losses with no right to build the project.
A typical option agreement would run for up to five years and would give the project developer the right to enter into a 25 year lease once all consents are lined up. At the option signing, there is typically an agreed option fee, and independent legal costs for the farmer, which would typically be paid by the promoter. The presence of an option fee and legal representation keeps all concerned honest in terms of giving the site the proper time and attention needed to develop a solar park.
The following areas should be covered:
Terms and conditions for making payments, which include the timing of payments and any conditions which would apply if grid connection is somehow delayed.Construction consequences for the farm business, which refers to access to the land and likely implications for soil structure.Maps and routes through the farm where cables will run.Future site extension. This will normally be subject to further negotiation. An access right to the land after the construction has been completed. These sites could easily be vandalised and will most likely be fenced off with a lockable gate. The frequency and route of access will have to be negotiated between the developer and the farmer.Site management and maintenance.Responsibility for insurance and any legal costs.Decommissioning of the project after the agreement period. This includes the removal and disposal of the existing panels together with the reconstitution of the land for agricultural activity. Personal risk
There are three options available for development: lease, joint venture or self-development. Identify which you want before embarking on a route. Even if you get planning permission, you do not need to develop the project yourself. The planning consent has a value to it depending on size and other factors. Most farmers will opt to lease the land on a long-term agreement to a developer who is familiar with obtaining such planning permissions and power purchase agreements.
Long-term leasing
Some developers are offering farmers a long-term lease on which the developer will engage with an agricultural activity. The latest Agri-Taxation Review introduced a fourth threshold for lease periods of 15 years or more with a tax exemption for the first €40,000/annum. If the developer has a herd number or is carrying out an agricultural activity, then the farmer would be eligible for the tax-free income. It is important that such agreements are included in the lease agreement and that advice from an accountant is sought.
Land eligibility
Is the land eligible for the Basic Payment Scheme (BPS) from 2015 to 2019? This is a common question. The Department of Agriculture is currently preparing a dossier to present to DG Agri in the European Commission in order to get clarification.
Agricultural activity
Across Europe It is very often included in planning applications for solar PV farms that both the land between and underneath the rows of PV modules should be made available for grazing of small livestock. Larger farm animals such as horses and cattle are considered unsuitable since they have the weight and strength to dislodge standard mounting systems, while pigs or goats may cause damage to cabling, but sheep and free-range poultry have already been successfully employed to manage grassland in solar farms while demonstrating dual-purpose land use.
Opportunities for cutting hay or silage, or strip cropping of high-value vegetables or non-food crops such as lavender or cereals are thought to be fairly limited and would need careful layout with regard to the proposed size of machinery and its required turning space. However, other productive options such as bee-keeping have already been demonstrated.
It is desirable that the terms of a solar farm agreement should include a grazing plan that ensures continued access to the land for the farmer, ideally in a form that permits BPS payments. The general calculation for PV demonstrates that 25% of the utilisable agricultural area is removed due to the presence of the panels.
Ground mounted
For ground-mounted PV systems it is crucial to soil-test proposed development areas in order to indicate how the mountings will be made safe and secure. In a good deal of situations, the S-shaped metal legs are pile-driven. However, in very light soils or on very rocky sites other technology types may be needed. Warranty periods must be determined for ground-mounted PV systems.
Solar photo voltaics (PV) is one of a number of renewable technologies which will help us meet our renewable electricity targets of 40% renewable electricity by 2020.
There is widespread expectation within industry that a renewable energy feed-in tariff (REFIT) will soon be announced by the Government to support the development of large-scale (5MW) solar projects. This has led to what can only be described as a feeding frenzy among solar PV project developers, who are pursuing suitable sites of 10-12ha (25-30 acres). These are ideally within a short distance of a grid-connected sub-station. At present, there is no subsidy or support available for PV. Developers will have to consider whether sufficient subsidy will be available when bringing forward projects.
Read also Energy sector at a crossroads: Tom Bruton warns expectations of a solar tariff in the near future may be misplaced.
Farmers need to be cautious in signing any exclusivity deals with potential developers and they should only do so if the terms are beneficial. In most situations an exclusivity agreement is not legally binding unless a letter of intent or memorandum of understanding has been included.
Lease agreements
Options and lease agreements should provide as much protection as possible for farmers. No developer in their right mind will seek an option agreement for any period less than five years. Some developers are offering exclusivity agreements or letters of comfort to farmers for perhaps a one year period. Furnishing a letter like this will not cost the developer anything. They are short one to two page letters with no legal advice on either side.
They do not indicate any commitment from the developer that they mean business and they do not demonstrate that the developer has the technical knowledge to complete such a project. It would be extremely risky to rely on planning authorities or ESB networks on grid connection to give a turnaround decision within one year.
This exposes the promoter to a very serious risk at the end of a one year period in that the land owner may be no longer agreeable to proceed while the developer may be carrying very substantial fees and losses with no right to build the project.
A typical option agreement would run for up to five years and would give the project developer the right to enter into a 25 year lease once all consents are lined up. At the option signing, there is typically an agreed option fee, and independent legal costs for the farmer, which would typically be paid by the promoter. The presence of an option fee and legal representation keeps all concerned honest in terms of giving the site the proper time and attention needed to develop a solar park.
The following areas should be covered:
Terms and conditions for making payments, which include the timing of payments and any conditions which would apply if grid connection is somehow delayed.Construction consequences for the farm business, which refers to access to the land and likely implications for soil structure.Maps and routes through the farm where cables will run.Future site extension. This will normally be subject to further negotiation. An access right to the land after the construction has been completed. These sites could easily be vandalised and will most likely be fenced off with a lockable gate. The frequency and route of access will have to be negotiated between the developer and the farmer.Site management and maintenance.Responsibility for insurance and any legal costs.Decommissioning of the project after the agreement period. This includes the removal and disposal of the existing panels together with the reconstitution of the land for agricultural activity. Personal risk
There are three options available for development: lease, joint venture or self-development. Identify which you want before embarking on a route. Even if you get planning permission, you do not need to develop the project yourself. The planning consent has a value to it depending on size and other factors. Most farmers will opt to lease the land on a long-term agreement to a developer who is familiar with obtaining such planning permissions and power purchase agreements.
Long-term leasing
Some developers are offering farmers a long-term lease on which the developer will engage with an agricultural activity. The latest Agri-Taxation Review introduced a fourth threshold for lease periods of 15 years or more with a tax exemption for the first €40,000/annum. If the developer has a herd number or is carrying out an agricultural activity, then the farmer would be eligible for the tax-free income. It is important that such agreements are included in the lease agreement and that advice from an accountant is sought.
Land eligibility
Is the land eligible for the Basic Payment Scheme (BPS) from 2015 to 2019? This is a common question. The Department of Agriculture is currently preparing a dossier to present to DG Agri in the European Commission in order to get clarification.
Agricultural activity
Across Europe It is very often included in planning applications for solar PV farms that both the land between and underneath the rows of PV modules should be made available for grazing of small livestock. Larger farm animals such as horses and cattle are considered unsuitable since they have the weight and strength to dislodge standard mounting systems, while pigs or goats may cause damage to cabling, but sheep and free-range poultry have already been successfully employed to manage grassland in solar farms while demonstrating dual-purpose land use.
Opportunities for cutting hay or silage, or strip cropping of high-value vegetables or non-food crops such as lavender or cereals are thought to be fairly limited and would need careful layout with regard to the proposed size of machinery and its required turning space. However, other productive options such as bee-keeping have already been demonstrated.
It is desirable that the terms of a solar farm agreement should include a grazing plan that ensures continued access to the land for the farmer, ideally in a form that permits BPS payments. The general calculation for PV demonstrates that 25% of the utilisable agricultural area is removed due to the presence of the panels.
Ground mounted
For ground-mounted PV systems it is crucial to soil-test proposed development areas in order to indicate how the mountings will be made safe and secure. In a good deal of situations, the S-shaped metal legs are pile-driven. However, in very light soils or on very rocky sites other technology types may be needed. Warranty periods must be determined for ground-mounted PV systems.
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