WITH landowners still being offered solar development opportunities, negotiating the right terms for rent is critical.

The rents offered by developers are often significantly higher than income from the use of the land for agricultural purposes.

It is easy however to get carried away by the initial offer and fail to recognise that the initial draft documents are often heavily weighted in favour of the developer.

The following are examples of rental provisions, found in the developer’s standard documentation, which can be misunderstood.

•Rent is payable when the development works commence: the landowner needs protection as the start of the works may be delayed. The developer will often be entitled to complete the lease, even if planning permission for the development has not been obtained.

•Rent is payable when 100% of the PV cells are generating electricity: there is a risk that the developer deliberately fails to connect the last few panels to avoid paying rent. The landowner must address this risk.

•Rent is payable for £x per megawatt of installed capacity: the landowner needs protection in case the installed capacity is not as expected.

•Rent ceases to be payable when the panels are decommissioned: the lease may continue to exist for a number of years after decommissioning has occurred, during which period the landowner would not receive any rent.

•Rent is £x per acre: the landowner needs to consider whether the developer has the right to exercise the option over all or part only of the land, subject to the initial option. He should clarify whether land used for access roads, switchgear houses, compounds, substations etc. is to be included in the calculation of rent.

•Rent is payable on completion of the lease: the best option, as this creates certainty for the landowner. He will know when the rent will be paid, even if there are delays in carrying out the development.

As can be seen from the scenarios described, the rental outcome varies considerably, depending on the wording of the actual provisions in the documentation.

Legal advice should be sought before entering into any agreements, to ensure the landowner appreciates the meaning of the agreed terms and that those terms reflect the matters agreed between the parties.

For further information contact Paul Hazeldine, partner, 0845-2091830 paul.hazeldine@clarkewillmott.com