Farmers considering leasing land for solar farms are being urged to read the small print carefully, or risk being left with bills running into tens of thousands of pounds when panels are eventually removed.
Legal experts warn that too many landowners are swayed by the promise of long-term income but fail to address expensive obligations at the end of agreements. Without watertight clauses, farmers could be liable for the costs of dismantling equipment and restoring land themselves.
Zoe Smith, head of commercial property at ORJ, said it was ‘very important’ that decommissioning terms are clearly written into contracts.
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“This involves removing the equipment and restoring the land, work that can cost tens of thousands of pounds,” she explained. “Solar leases can run for up to 50 years, so while it may be tempting not to think ahead, it’s crucial.”
Much of the equipment, she added, requires specialist disposal. One safeguard is a decommissioning bond or fund, ensuring money is ring-fenced for the work even if a developer goes out of business.
Ms Smith recently acted for a farmer who secured such a bond: “The cost of the decommissioning work will be regularly assessed over the course of the lease, with the required amount set aside. This offers far greater protection and peace of mind.”
Beyond decommissioning, experts highlight additional risks including potential tax liabilities, the loss of agricultural reliefs and subsidies, and restrictions caused by new rights of way or easements.
“Renewable energy projects can be an excellent way for farmers to diversify income,” Ms Smith said. “But expert legal advice is strongly recommended to ensure interests are properly safeguarded.”
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