Steps For Securing a Solar Project as a Developer

Are you in the process of securing a solar project as a developer? If you’re narrowing down potential sites, there are a few points to consider before optioning any land.

If you’re looking for a comprehensive guide to securing a solar project as a developer, I’ve got you covered.

This detailed rundown will cover everything from planning permission woes to local approval, dispute resolution, and everything in between.

Building an excellent relationship is always a great starting point when securing a solar project as a developer.

But if you play your cards right and offer a competitive initial payment for the land, you’re far more likely to close the deal.

Now, let’s explore exactly how you can improve your chances of securing the perfect plot of land for your next solar farm development.

Things to Think About When Securing a Solar Project as a Developer

Planning permission and research

To assess whether a site is suitable for solar development, you’ll want to look more closely at:

• Average sunlight
• Terrain
• Topography
• The feelings of the local community towards new projects

And if a site gets a green flag for all of these points, you’ll need to wade into the planning permission minefield.

Planning permission is one of the major hurdles you’ll face, but it doesn’t have to be quite as terrifying as you might imagine. However, developers must run applications for larger solar farms past Local Planning Authorities before construction occurs.

The number of applications for solar farms with a capacity of over 1 MW increased yearly between 2010 and 2015. However, the reduction of subsidies caused a significant drop in 2016 and 2017.

While applications are slowly increasing again, there have been some setbacks. Since 2021, 29 solar farms have been refused planning. Although around 20 of these will go to appeal, there’s no guarantee that local authorities will approve these projects.

It’s also important to note that planning permission for 23 solar farms was refused across the UK between January 2021 and July 2022 alone.

So, you’ll need to be ready to appeal your project if it is outside an area with several existing projects.

A note on the removal of Renewables Obligation Certificates (ROCs)

It’s also important to consider how the removal of Renewables Obligation Certificates (ROCs) may impact your project’s profitability.

Many developers are looking for far larger land areas to mitigate the loss of ROC income.

This may impact how much cash you’ll need to set aside for option agreements and income payments during a project’s lifetime.

You can make up much of the income lost from this subsidy with improved technology. However, the new Contracts for Difference (CfD) scheme is significantly less lucrative than the current ROC scheme.

To save on the costs and time of securing planning permission for a new site, you might want to consider using land from an existing project.

If this interests you, think about landfill gas sites that are coming to the end of their life. These are often excellent sites for solar farms and give new life to land that’s otherwise tough to develop.

Getting a solid commitment from landowners

A project isn’t likely to go anywhere without a solid legal commitment from a landowner. So, developers must draw up a valid option agreement that clearly outlines terms for reserving the land.

These are typically signed by both parties and mean that the land is bookmarked for a project while the developer performs checks and tests.

Checks can take the form of:

• Wildlife impact assessments
• Feasibility studies
• Tests on solar irradiation levels
• Assessments on the surrounding land for shading issues
• Obtaining planning permission for the site

All of these factors can take years to figure out, and that’s why the minimum term for option agreements is typically around five years. However, option agreements can run for up to 10 years for some projects as investigations often drag on.

Although most landowners wanting a project on their land will agree to sign an option agreement, it’s worth sweetening the deal.

Offering a great payment arrangement promise for the final lease or a larger upfront payment can keep a landowner on your side.

The key to success is clarity.

Ensure that you outline how long things may take, payment terms and what you’ll carry out during an option period. This way, you’re far more likely to establish a successful and fruitful relationship with a landowner.

Remember, several developers may be looking to secure a particular site for a project. This is especially true if the land is ideal for solar development (flat and south-facing). So, the last thing you want to do is over-complicate the process and lose the landowner’s trust.

Getting approval from the community and keeping the project local

Where you can, it’s a good idea to keep the local community in your corner by hiring local contractors and community workers.

I completely understand that this isn’t always going to be feasible.

However, hiring local contractors and consulting with local businesses for construction work should be relatively easy.

For example:

• If you’re building a project in Wales, work with Welsh consulting and construction firms. You can even sign off your correspondence with the local language for an extra friendly touch.

It won’t necessarily make or break a project, but offering extra income to the local community will only make them view a new project more favourably. And that’s always worth considering.

When dealing with local landowners, building a strong relationship from the start is key. This way, they’ll feel more comfortable approaching you about any issues that might cause the project to falter later.

Plus, it’ll show that you have a genuine interest in the project (and who you’re working with). Just make sure that this interest is genuine – most landowners can see right through developers who are after a quick buck or two.

Keep your landowner in the loop as the project progresses and ensure the local community is on board. This will save you potential headaches down the line.

Respect the land (as it’s likely to work in your favour)

This probably goes without saying, but respecting the land you’re working on is essential.

Solar projects can cover vast areas (often more than wind projects), which means construction and maintenance almost always involve heavy machinery. Without proper planning, this can lead to damage or disruption to local ecosystems.

To avoid any disputes down the line, clearly outline the potential impact on the land before starting the project. This will ensure everyone understands the impact and will allow you to agree on measures to minimise disruption.

Although it’s not a certainty, solar sites may experience:

• Soil compaction
• Increased erosion
• Increased runoff
• Potential alterations to drainage channels

These changes to the land are largely down to the clearing and grading that needs to happen to make room for large rows of panels.

That’s why it’s essential to outline the acreage that the panels will require and how the panels may affect a landowner’s property.

This way, expectations will be clear before an option agreement is signed. Plus, any landowner you work with will know you respect their land.

Since landowners are likely to have questions about the impact on their day-to-day operations, it’s crucial to have clear answers (and proof from other projects).

One key point to highlight is that, in many cases, the land can still be used for grazing and farming. However, landowners should understand that overall land use will be reduced for the entire option period.

In short, the more transparent you can be about the day-to-day impact of the project, the better.

Avoid disputes by having open communication

As you’ve probably gathered by now, having a good relationship with a landowner is vital to a healthy project.

If you’re an established developer and struggle to communicate one-on-one with landowners, it’s worth assigning them a dedicated point of contact in your team.

Not only can this save you a lot of time during high-pressure periods, but it will quickly resolve issues that a landowner may have.

It’s also worth involving landowners in the site’s upkeep throughout the project’s life. Doing this will make a landowner feel like an equal partner and encourage them to raise issues they notice day-to-day.

Maintaining open communication also makes you less likely to fall into a nasty dispute, which can cost hundreds of thousands of pounds in the worst instances (up to £300,000 in some cases). So, having a good relationship with the landowner is worth its weight in gold.

Have conversations with landowners about their thoughts on developers

If you’re securing a solar project as a developer, expect competition, especially if the site is particularly promising.

To get ahead, talk to landowners about their views on any developers who have already approached them.

When having these conversations, be respectful and subtle. The goal is to understand how committed the landowner is, not to put pressure on them.

If a project is already up and running with another developer, keep an eye on their relationship. Should it start to sour, you may be able to step in.

Similarly, should a project be nearing the end of its lease, reach out to the landowner. They may prefer to have the project decommissioned at the end of its life, but if they’re open to keeping it operational, you could take ownership of the site at a decent rate.

Just be careful not to push too hard – overly pushy developers usually aren’t well received, so tread lightly.

Lay out a maintenance and decommissioning plan that will clear things up for the landowner

Landowners will naturally be worried about what happens once a solar farm is up and running. They’ll likely want a clear understanding of the construction, maintenance and decommissioning phases before committing.

The maintenance period for a solar farm should be relatively straightforward, as solar panels require little upkeep to function correctly.

The site will require semi-regular cleanings and vegetation management to handle dust accumulation and shading on the panels. However, these maintenance tasks aren’t intrusive and won’t impact a landowner’s day-to-day activities.

However, one crucial thing that leases can occasionally overlook is clear decommissioning terms. While decommissioning a project is technically a landowner’s responsibility, this task usually falls to the developer or current site operator.

To avoid disputes, developers should always make their decommissioning plans as straightforward as possible to give landowners peace of mind. By agreeing on a clear exit plan in writing, both parties will avoid unexpected costs and legal headaches.

So, set aside time to discuss decommissioning before signing the final project lease.

Don’t be afraid to showcase your portfolio and build trust from the get-go

In any landowner-developer relationship, there’s nothing more important than building trust. So, if you’re securing a solar project as a developer, you’ll want to showcase an excellent portfolio.

Of course, this only applies if you’ve previously run large-scale solar projects that you can demonstrate. But if you can show how financially viable previous projects have been, landowners are far more likely to sign a long-term contract.

And if you have a poor reputation from previous projects, word will likely have already spread among local landowners. This can make securing new projects more challenging and you will need to rebuild trust before moving forward.

Final Thoughts

When securing a solar project as a developer, getting on a landowner’s good side is always the best place to start.

If you pair this with solid lease terms and a viable decommissioning plan, landowners will be even more impressed.

Securing a solar project as a developer will take a lot of work. After all, you need to find suitable land, lock it down with an option agreement, and build the project. You’ll also need to keep a landowner sweet for around 30 years.

However, with open communication and local support, you’ll have a far easier time during a project’s lifecycle. If you’re seeking specific advice on securing a solar project as a developer, get in touch. Our expert team will help you secure the most suitable land for your next project.

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