Solar Farms, Land Owners Beware
Since the feed-in-tariff came into place in April there have been a large number of companies looking to
sign up land owners to option agreements to build solar farms on their land. Now this can be an
excellent way for a farmer/land owner to maximise the income they generate and also to diversify their
income.
Typically the option will be a rental agreement lasting for 25 years where a fixed fee is paid or a
percentage of the FIT is offered. The yield will almost always be multiples of what could be made by
farming the land sounds great so where is the catch?
The catch is that the site has to be built and producing energy by March 2012 to be viable, so with
planning timescales this means you have just one chance with one company to generate this income.
Some of the companies out there signing land owners up don't have any intention of building the sites
instead they are looking to get the option agreement signed and sell it on to a company with the
infrastructure in place at a profit. This means if they don't manage to sell the option on the site will not
be built and the land owner will miss out on this once in a lifetime opportunity to benefit from the feed
in tariff. So what should you look for?
Proof of funding is the most important element. If a company contacts you and the cannot prove they
have funding in place do not deal with them. Whatever they offer you is irrelevant as they don't have
the means to build the site.
I would also ask whether the company providing the finance (generally investment bank etc) has
invested in green energy before and if they have any other solar projects up and running. This reduces
the risk of funding being pulled at a later stage.
Next most important is which company is building the site and what experience do they have in large
scale solar farms? Ensure the company has experience in building solar farms and preferably as some
running effectively in other solar markets such as Spain or Germany.
Ensure