Some of you may have read our article published in late February/early March about the rush to sign up landowners to Options for large solar generating schemes occupying sizeable areas of land in which we said the sun would obviously shine favourably on a few but, as a wise man once said, “Into every life a little rain must fall”

Unfortunately that rain has fallen rather sooner than predicted and on everyone in general because the announcement by Gregory Barker, Minister of State at the Department of Energy and Climate change on the 18^th March that the Feed in Tariffs (FIT’s) for large scale solar generation projects were being slashed (in the case of projects capable of generating 5 megawatts or more by just over 70% from 29.3p/kWh to 8.5p/kWh), has effectively pulled the rug from under most such schemes not already up and running

There are reports of a number of solar generating companies withdrawing from negotiations with landowners and it seems inevitable that some schemes where the companies already have entered into an Option may not proceed as a direct result of this drastic Government action.

However there is still potential for some smaller schemes, generating up to 250 kilowatts proceeding because the new FIT’s for these have been set at a higher level of between 15p/kWh and 19p/kWh and the equipment for such schemes can often installed on the roofs of farm or industrial buildings.

If you are approached by a company interested in installing solar panels on the roof of your buildings among the things to be considered are

·Is the roof and structure of the building strong enough to support the extra weight of the panels and is it likely to last the long time that the lease requires (25 years plus).

·What happens if you want to make any changes to the building during that time to meet new farming practices

·Who is going to be responsible for repairing any future leaks in the roof and what will the position be if the plant has to be shut down so that panels can be removed to get to the leak.

·Insurance of the building that gives the support – your insurers will have to be notified of the change in circumstances.

·What access the company will need to the building, how often and by what route. Depending of the location within the farm the existence of one of these installations for 25 years or more could make the farm less attractive to buyers and therefore affect its value

·The lease should cover who is responsible for removing all the equipment and restoring the building at the end of the lease or if the company goes out of business and no one takes it over, although this last one is difficult to cover without the deposit of a Bond which is generally available.

·There will be no Agricultural Property Relief (APR) from Inheritance Tax on the capital value of the income received from the installation and it is unlikely that the land would meet the requirements for Business Property Relief in place of APR

On the plus size you may be able to buy some of your electricity direct from the company concerned at a greatly discounted rate compared with what you pay your present supplier but remember they will only be able to supply you when they are actually generating i.e. during daylight hours and if you use most of your electricity during the hours of darkness that may not be such an advantage as first thought

If we can be of help to you with advice on any aspect relating to these schemes please contact Bryan May on 01364 646182 or bryan.may@luscombemaye.com