Managing a Solar Farm: What Landowners Should Know

Topic: solar projects Read Time: 13 mins
Landowner type:
Independent landowners | Institutional landowners
Energy: Solar
Back to Blog

Are you a landowner looking for guidance on managing a solar farm? Although you’ll have little involvement with the day-to-day operations of a commercial solar farm project, this go-to guide will lead you through everything you need to know so you’re not left in the dark.

If you’re looking to get a new solar project on your land, you might wonder how it’ll be managed during its lifetime. And as most solar leases run for over 30 years, you’ll undoubtedly want to be in the know.

This guide to managing a solar farm will cover everything, from initial contracts to the full-blown management phase. We will also run you through what your site operator will do to manage the project, as well as things that you can (and should) be doing to manage things on your end. Whether you’re just starting out on your renewable energy journey or want more information now that you’re up and running, just stick with us. We’ve got ALL the details.

We highly recommend using the contents section below as a guideline to navigate to the parts of this article that are most relevant to you.

The first section is dedicated to NEW LANDOWNERS without a project running on their land. This will cover everything you need to know about managing a solar project before it is operational.

The second section should be read by EXISTING LANDOWNERS with a fully functional project on their land. So, if you’ve signed a lease and your project is up and running, you should start here.

The final section gives general management tips to ALL LANDOWNERS.

Now, let’s get straight down to it.

If you’re a new landowner, you’ll want to start your journey here. In this section, we’ll run through the following things:

  • The importance of a lease agreement (and what you’ll need to include)
  • The ins and outs of payment arrangements for a solar project
  • Dispute resolution tips

Although this list isn’t extensive, it should give you a good starting point to ensure that managing your solar project is easier when it’s up and running. To start with, you’ll want to understand that everything comes down to the lease agreement. So, creating a watertight lease and getting it carefully checked by a qualified solicitor is crucial to a great outcome for any new project.

You will usually sign an option agreement first, after which a 5 to 10-year gap could exist before a project is on its feet. During this time, your developer will conduct feasibility studies, apply for planning permission, and look into Grid connection. Before this option agreement ends, your developer will likely approach you with the final lease (if everything goes ahead as planned). 

Most solar projects have a life cycle of up to 30 years. And for that reason, it’s important to include clauses in your contract that discuss decommissioning plans (getting this in writing is crucial). If you’re wondering why, it’s because returning the land to its original, pre-project state is technically the responsibility of the landowner – not the developer. Although most developers will take on this task and restore your land, it’s technically not required unless explicitly stated in your lease agreement.

Even if your developer DOES agree to decommission the site, we always recommend that you have in writing from your developer that they set aside the funds to handle decommissioning costs at the project’s end. Realistically, no one wants to be left in the lurch with an enormous decommissioning task they haven’t budgeted for. If nothing else, it’s better to be safe than sorry.

Before signing a final lease agreement, you’ll typically sign an option agreement. Although this is not the final lease agreement, it is still very important, as very little will change between your option agreement and final lease agreement. So, before signing the option agreement, you’ll want to carefully review the available payment arrangements and decide which works best for YOU.

For reference, these are the typical payment options that are available:

  • Fixed rent: Fixed rent is the most straightforward payment arrangement you’ll find, and it’s perfect for landowners who want a more hands-off experience. You’re not exposed to any volatility with the project or energy markets, and you’ll get a fixed fee regardless of how the project performs. Just be aware that the amount paid is usually less than you’d get with other rental types. So, you’re essentially taking a loss for stability.
  • Turnover rent: Turnover rent sees landlords receive rent based on the percentage of their site operator’s income. It’s usually higher than other rental types and lets landowners feel more invested in the project’s success. However, you’ll need to be seriously diligent about monitoring the accuracy of all payments (and this information can be tricky to come by).
  • Hybrid rent: Hybrid rent combines fixed and turnover rent, offering a guaranteed rent plus a bonus payment. It gives you complete visibility over how the project is performing but requires due diligence to monitor your payments’ accuracy regularly.
  • Multiple of outputs or generation rent: Landowners will receive rent based on the amount of electricity a site produces, which is then multiplied by a fixed value. We generally recommend this payment arrangement if your solar farm is set to have an impressive output. The main downside is that this arrangement directly exposes landowners to the project’s operational risks.

There’s nothing worse than a dispute, but it can become even more difficult if you haven’t outlined your respective rights and responsibilities before signing a contract.

A farm owner reviewing her solar farm project contract.

Disputes are usually costly, and we’ve seen some run into the hundreds of thousands (up to £300,000 in one extreme case). So, if possible, you’ll want to avoid any disputes reaching this level.

But how do you do that? Well, it’s all about documenting responsibilities right at the project’s outset.

Not only will you want to work dispute resolution plans into your lease agreement, but keeping copies of all documents is extremely wise.

From lease agreements to letters, emails, and updates, keeping all correspondence to hand will help significantly in a dispute situation.

The cost of dealing with a dispute will depend on what is written into your lease. Even being able to recover legal fees must be detailed in the lease. Further to this, you’ll want to ensure you’re signing over only the necessary rights to your land. 

Are you looking for more?

If you need more help negotiating a contract for your solar project, head over to our dedicated blog on creating a watertight lease. This should help you get the best possible deal for leasing your land – both income-wise and keeping your land in the best condition during the project’s lifetime.

To carry on from what we were discussing about leases, it’s incredibly valuable to consult a group of experts before signing a long-term lease. This should always happen before the project is constructed. Consulting a group of experts allows you to get your ducks in a row before bookmarking your land for up to 30 years – which is an enormous commitment for any landowner.

The main experts we recommend checking in with as a landowner are:

  • A solicitor
  • A land agent
  • An accountant
A solar project expert discussing a contract

Solicitors will generally help review and draft a lease, make sure your contract abides by current regulations, and help with the negotiation process. They can also help you avoid classic pitfalls like not opting out of the Landlord and Tenant Act 1954 (seriously, you’ll always want to opt-out as a landowner as it gives you far more control over your land).

On the other hand, land agents can help you apply for necessary permissions and create timescales for decommissioning.

When a project is up and running, accountants can help review the project’s land rents by undertaking a full payment audit. They can then check how much energy a project is set to generate each month and ensure you’re receiving the correct payments.

In short, each expert is invaluable in their own way and is certainly worth the investment.

A final word for new landowners

In our book, setting yourself up with a watertight lease agreement should be your top priority. With clear terms, payment arrangements picked, and decommissioning plans laid out, you’ll be in a strong position. Plus, a clear contract with well-defined terms will make managing your project so much easier. 

If you’re not quite sure where to start with your project, a SiteStart scan is bound to set you up for success. We’ll trawl through a large selection of comparable sites and make sure you’re getting fair, market rates for your new project. With facts and figures in hand, you’ll be in a stellar position to negotiate – right from the beginning.

Get the most suitable project developer 
Compare the rents of UK wind farms to negotiate the best land rent for you
Get the best contractual terms
How SiteStart works

If you already have a project on your land, you’ve probably skipped the previous section and landed here. In this part of the article, we’ll discuss everything that landowners will want to know if they already have a project up and running.

We’ll cover:

  • The ongoing maintenance tasks that will take place during the lifetime of an average solar project

If you’re a landowner with a project that’s up on its feet, the construction contract will have moved into a maintenance or operational contract. This is typically when the site operator (this may be the same company that developed the project) steps in to maintain the site. Just so you’re aware, the project will likely change hands a couple of times during its lifetime. This is pretty typical as companies buy and sell assets quite often, depending on how their investment strategies change over time.

It’s also worth mentioning that there WILL be maintenance checks throughout the lifetime of a project. But with solar, the maintenance is minimal, with cleaning and technical checks being few and far between. Plus, any maintenance will have little to no bearing on a landowner’s day-to-day activities, meaning you won’t need to switch up your current lifestyle much at all.

An professional cleaning a solar panel using a mop

  1. Mowing in and around the solar array to prevent any overgrowth that might impact the panels.
  2. Hedge-cutting and trimming all surrounding trees. This avoids unwanted shading over the panels, which might decrease output over time.
  3. Spraying and weed control might occur to avoid pesky weeds competing against the solar panels for adequate light.
  4. Cleaning is bound to happen periodically, as the panels can become caked in dirt or covered with bird droppings, snow, or ice. Cold water and gentle detergents are usually used to remove grime, and the site operator may also check indicators and LED lights for any failures.
  5. Defect checking will also occur regularly and involve a visual inspection of every solar module. The management team will check for chips, dents, cracks, fogged glazing, and extreme delamination that may affect the panels’ overall output. If something untoward is found, the operator will arrange to fix or replace these panels.
  6. Site operators will check for the structural stability of the mounting frames regularly. The bolts should be rust-free. Junction boxes will also be checked for any rodent or weather damage.
  7. Wiring and electrics will be checked for insect damage or corrosion several times during the lifetime of a project.

If you’re wondering exactly how managing a solar farm works in practice, let’s quickly run through the basics.

Solar farms are often monitored with CCTV and perimeter protection. This ensures that security professionals protect the site and doesn’t suffer unnecessary damage from trespassers. The CCTV usually includes infrared and thermal imaging cameras, which can differentiate between wildlife disturbances and criminal intent. This high-spec camera usually puts landowners at ease, as they know their land isn’t at risk.

As well as using CCTV, most developers will install a solar monitoring system that tracks the panels’ efficiency. If there’s a significant dip in recorded efficiency, the site operator can arrange to have the panels looked at and fixed.

The solar monitor usually includes hardware attached to a solar array, an internet connection, and software to track changes. The monitor reads the data that flows through a solar array’s inverters. This will show when a system is at peak performance, and it’s great for picking up defects and errors during a project’s lifetime.

Now that we’ve split the previous parts of the guide into separate sections, we’ve arrived at the advice and information that applies to landowners at every stage of the process. So, whether you’re a landowner yet to host a project or you’re a landowner with a fully-fledged project, stick with us.

In this section, we’ll run through:

  • The importance of the landowner and site operator relationship
  • What landowners can do to keep their projects running smoothly

A good relationship between a site operator and a landowner is vital for any successful project. Not only does this help to resolve disputes quickly, but it’s likely to make the overall process more pleasant for both parties.

As a landowner, you can boost your relationship by:

  • Being helpful and considerate of your site operator’s needs and daily requirements.
  • Informing your site operator quickly if something isn’t working as it should.
  • Getting on the same page at the start of the project and airing any concerns about the project and how it will run.
  • Asking for a rundown of their responsibilities early in the project to ensure everything is handled correctly.
  • Discussing dispute resolution terms early in the process (and not losing your cool when talking about any issues).

If you don’t believe just how important a site operator/landowner relationship can be, take it directly from someone who knows. David is a landowner hosting a 4MW wind farm on his land. Here, he explains how he keeps a positive relationship with his site operator.

One of the best things landowners can do on a project is manage their payments and carry out regular audits. This catches any missed payments and ensures that the landowner receives accurate payments for leasing their land.

To properly audit your site, it’s worth checking payments as and when they arrive and asking your accountant to assist. There is a statute of limitations for recovering missed or incorrect payments, so it’s in your best interest to track income accurately and catch any issues. This way, you’ll be more likely to get the income you’re owed without a dispute.

It would help if you also kept an eye on who’s in charge of the project. As we mentioned earlier in this article, projects often change hands during a lease. And this is simply because the leases are incredibly long. Site operators often retire or move on during a project’s tenure. So, it’s a great idea to check in with your site operator regularly and ask for a heads-up when the project is set to change hands. This gives you plenty of time to get to know a new site operator before they’re managing the project full-time.

It’s also worth raising any issues you spot with the panels or mounts on your land. After all, you’ll see them daily and are more likely to notice anything that’s amiss. Raising minor issues before they become serious problems will put you in good stead with the site operator. Over time, this will keep the project operating at maximum efficiency.

In many cases, landowners will offer to help landowners with maintenance. When this happens, paid arrangements are often set up to compensate the landowner for their time. Not only can this boost the site operator/landowner relationship, but it’s even more extra income in the landowner’s pocket.

In short, the best thing you can do when managing a solar farm as a landowner is to be PROACTIVE.

Managing a solar farm is generally out of a landowner’s hands. But as you can see, it’s always worth knowing what’s happening with your land (and how you can help things run more smoothly).  Whether that’s picking up on broken panels, assisting a site operator, or tracking your payments, getting involved with the process is bound to make you feel more confident.

Also, the more you know about your solar farm, the more you can negotiate a better deal if your project is extended. And really, what could be better than that?

If you’re interested in getting a solar farm on your land (or want to ensure you’re getting the correct payments), get in touch. The team at Lumify Energy will gladly guide you through the process and ensure you’re getting the impressive rental payments you deserve for leasing your land.

Solar farms cost around £12 per kilowatt of installed capacity to maintain. However, it’s worth noting that the maintenance costs will increase as the project size increases.

Financing a solar farm depends entirely on who’s interested in building the project. Some landowners can self-develop a project and front the costs themselves (or through external investments). For other projects, developers will take the reins and use bank financing, angel investing, their own funds, or a mixture of all the above.

The average solar farm lasts between 30 and 40 years before it needs to be decommissioned. This will vary based on how well it’s maintained and how the solar panels are holding up. Past this point, the project will either need to be decommissioned or repowered.