The generation of solar energy offers opportunities for agricultural entrepreneurs to increase their return. Various structures are possible and good legal advice is necessary for the development of a solar project. 'If you are not going to develop yourself, make clear and concrete agreements in advance with the project developer,' advises lawyer Sophie Dingenen.
From solar panels on a relatively small roof to a solar park of more than 100 hectares, the generation of solar energy takes place on every scale, including in the agricultural sector. Law firm Bird & Bird supervises the development of renewable energy projects from A to Z. “This involves both sun and wind,” says Sophie Dingenen. “The ratio between sun and wind is currently about 50-50. A few years ago, solar energy only had a 20% share, so a clear shift is visible.”
Intent agreement
The projects that Bird & Bird supervises in the agricultural sector concern both sun on roof projects as the realization of solar parks on land. In both cases, a process always starts with an exclusive letter of intent between the roof/land owner and the developer,” says Dingenen. “In the exploratory phase that follows, often a period of 1 to 2 years, it is examined, among other things, whether the roof or land is (environmentally) technically suitable. Is it sturdy enough? Who pays any costs to make a roof or plot suitable for the construction of a solar project? Can the farmer still carry out work on his land during this phase or during the project? Those kinds of things are important to record in advance, so that all parties know where they stand.”
Obtaining SDE+(+), the permits (if necessary) and a connection with the required transmission capacity also come into play in this phase. “After these have been obtained, a purchase agreement will also have to be concluded if the roof/land owner does not purchase the energy himself,” adds Dingenen. “Things that are also important for a bank that takes care of the financing of the project. The solar project will be developed in a specially established project company without a solid balance sheet position. The bank wants to have insight into the future income flow of the project to repay the financing. This also means, among other things, that a bank will want to see that the solar project functions optimally and is profitable.”
Limited rights
According to Dingenen, an essential part of a solar project is the so-called establishment of limited rights. “This includes, for example, the right of superficies and ground lease. This ensures that the ownership of the solar panels does not automatically check the roof or land on which they are located. It is important that you can separate the solar project from the ground or building. If you do not arrange this properly as a land or roof owner, a developer will not want to do business with you. The financial risk is then too great. A developer will not want to risk losing the property once the solar panels are installed. The bank will also not finance a project company without the necessary securities and limited rights.”
A notary is required to establish the limited rights. The duration of the solar project is also determined at the time of establishing the limited rights. This is usually linked to the duration of the SDE subsidy. “Just like for wind projects, that is 16 years for solar projects. It is also possible to opt for a longer duration, for example 25 years, but this means that the project developer will have to make additional investments in the interim to keep the solar project profitable. An additional period of 3 years would not justify these additional investments. The project duration is also important for determining the transfer tax. This is calculated over the duration of the restricted rights and is paid by the project developer.”
Capture well
When all signals are green and the permits, contracts and subsidy have been obtained, the realization of the solar project can begin. In practice, 'all signals go green' for a farmer mainly means that he has concluded a good agreement with the developer. Dingenen: “In principle, the project developer takes care of everything. However, it is important that the aforementioned matters are properly recorded. Also for any tax rules that farmers can claim, such as the dual use of the land. And what happens when the contract period has ended? Do the solar panels then have to be removed and the ground or roof returned to its original state? Or will the roof or land owner take over the installation for a symbolic amount? Make clear agreements about this in advance and record this well.”