Growing Interest in Solar Energy in Ireland
Solar Photovoltaics (PV) is one of the renewable technologies available to help us meet out renewable electricity targets of 40% renewable electricity by 2020.
There is expectation within industry that a renewable energy feed-in tariff will soon be announced by the government to support the development of largescale solar projects. PV project developers are currently pursuing suitable sites of 25-30 acres. Ideally these are within a short distance of a grid connected sub-station.
Farmers need to be cautious in signing any deals with potential developers. Farmers are being asked to sign an Option Agreement that gives access to the developer for 2 or potentially 3 years to determine the feasibility of the project. The terms of a draft Lease (generally for 25 years) are also agreed prior to signing the Option Agreement. A Maintenance Agreement is also entered into at this time whereby the farmer agrees to maintain the land for the duration of the term of the Lease and is paid a fee for this service.
It is very important to take both legal and taxation advice before entering into a binding contract.
Options and Lease Agreements should provide as much protection as possible for farmers as you could effectively be restricting your land for 25 years and upwards.
If the developer is granted planning permission and the option is exercised, the farmer is required to sign the pre agreed Lease for a period of 25 years (generally). If planning permission is not granted and the development does not go ahead the option is not exercised and the agreement comes to an end. Even if the Option goes ahead and the Lease comes into effect, the developer generally has a right to terminate the lease at any stage. The farmer does not have this option.
Examples of some of the items farmers should seek to include in their agreements and negotiations are;
• Terms and conditions for making payments to include the timing of the payments and any adjustments in rent for inflation;
• Maps and routes through the farm where cables will run;
• Access rights for the farmer after the construction has been completed (generally the sites once constructed are fenced off with a lockable gate and the frequency and route of access will need to be negotiated);
• Responsibility for insurance and insurance costs;
• Decommissioning of the project after the Lease terminates;
• If the developer terminates the Agreement before the full 25 year Lease has expired the rent should continue to be payable until the project has been decommissioned and panels removed or disposed and the land reconstituted for agricultural activity.