Expert Advice Independent Landowners NEED

Topic: wind farm extension Read Time: 6 mins
Landowner type: Independent landowners Energy: Onshore wind
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If you’re renegotiating a lease for a wind farm extension as an independent landowner, you might be looking for expert advice that’ll help you achieve the best outcome possible. Read ahead for our suggestions on who to consult when independent landowners’ lease is coming to an end.

Are you ready to renew your current wind farm lease?

If so, then it’s always a good idea to seek professional advice before diving into the deep end.

As your contract will have been in place for up to 30 years, the competitive environment will have changed drastically since your last negotiation.

So, you probably won’t be negotiating terms with the same advisers as you dealt with the first time around.

If you want to approach renewal decisions with your eyes wide open, then stick with us.

Not only will we cover the experts that you need to be reaching out to before your lease ends, but we’ll spur you on to act now.

After all, letting your lease expire without a formal agreement instantly puts you on the back foot as a landowner.

3 Experts That Independent Landowners Should Speak to For Their Wind Farm Extension

When your lease is ending, you’ll want to walk into your renegotiation process with all the tools you need for success.

Although you can do plenty of research on your own, it’s always worth checking in with professionals.

Not only do they have accurate, industry-specific data available to them, but they can be useful for guiding your decision-making throughout the renegotiation process. 

And that’s certainly worth the investment.

If you’re an independent landowner, these are the 3 experts you’ll want to consult during renegotiations.

P.S.: If you’re an institutional landowner, you’ll find all the information you’ll need about teams and renewals right here.

Take a look at the video below where I discuss working with professional advisers.

A solicitor

Solicitors should be informed about your lease ending a few months in advance of the wind farm extension process.

They should serve a notice to your tenant that lets them know their lease is up for renewal OR that the landowner has decided not to renew.

There are deadlines involved with both options.

So, having a solicitor available ensures that you keep on top of legal deadlines before your lease expires.

Solicitors can also review and draft a new lease. 

This should consider new regulations that may not have applied when the lease was previously signed (up to 30 years ago).

All parties involved in the renegotiation process should agree to the key terms and definitions of a lease.

The solicitor can handle all of this, which removes you from a tricky legal process that you may not fully understand.

Your solicitor will need to know whether you’ve opted out of the Landlord and Tenant Act 1954. As this changes your options considerably at the renegotiation stage, you should volunteer this information quickly.

If you’ve opted out (which is always the right call), you can choose to end the current contract, bring the project in-house, or carry on as-is.

And a solicitor won’t just help YOU out either.

A solicitor can also help your site operator by registering key documents and providing site plans that are land registry compliant.

They are great all-rounders.

A land agent

When you’re dealing with wind farm extensions, the next expert you should consult is a land agent.

As large-scale renewable energy projects usually have planning permissions, you’ll want to make sure all documents are in place for renegotiations.

Any project with wind turbines over 100 feet high will have been through a stringent planning permission process. 

So, when you’re dealing with a wind farm extension, having these documents in place is crucial for success.

Not only can land agents apply for necessary permissions, but they’ll make sure everything is completed within deadlines.

Plus, land agents can agree on terms with site operators and create timetables for extensions and decommissioning.

With their expert eye, they’ll look at terms that need to be agreed upon (including up-to-date market rents!)

They should know what independent landowners are being paid across the country for similar sites and will therefore be able to discuss suitable payment arrangements.

If that wasn’t reason enough to hire them, land agents can also help with practical steps.

Whether that’s figuring out if rents should be linked to the CPI or reviewing your rent, they’re here to help!

It’s worth noting that the onus is still on the independent landowners to restore the site under appropriate planning conditions.

So, it’s important to make sure that your site operator has the funds ringfenced to cover the decommissioning.

Otherwise, independent landowners will be footing the bill.

For even more detailed information about your site (that can speed things along with land agents), feel free to explore our Lumify SiteScan™ options. They offer comprehensive market data that helps you benchmark a site’s value accurately.

SiteScan GIF

Compare the rents at hundreds of wind farms across the UK.

Access the best contractual terms written by the UK’s top solicitors to attain your ideal lease

100% of the landowners that we work with increase their rent negotiation offers

An accountant

The final expert to consider meeting when extending your wind farm project is an accountant. Although they can be incredibly useful during renegotiations, they’re one of the most underused assets (in our experience).

Accountants will help by reviewing the project’s land rents by undertaking a full payment audit. This enables them to see if the correct payments have been made in preparation for a lease renewal.

An accountant can then review how much energy has been generated month-on-month to ensure that the correct rent has been paid.

We feel that accountants can be helpful with a wind farm extension as they can determine the financial viability of a project.

Not only can they review your existing financial data, but they can vet new tenants to see if they’re financially secure.

Overall, they can greatly assist with a landowner’s financial planning and any tax implications that would arise with a new lease.

Aerial view of an operational wind farm

Once you approach an accountant to assist with renegotiations, they should set the following steps in motion:

  • Obtain the power purchase agreement from the site operator.
  •  Review all electricity generated based on the half-hourly electricity data.
  • Re-calculate each income stream payable under the terms of the power purchase agreement.
  • Reconcile the total amount payable to the amount received from the site operator.
  • Reconcile these payments to the amounts due according to the terms of the lease agreement.
  • Reconcile the amounts to historical rent statements, bank payments received, and the payments recorded in the site operator’s company accounts.
  • Calculate the rent payable for each month divided by the total amount of electricity generated during that month.
  • Compare this to the monthly rent payable for the previous years to identify any significant or unusual payments for further investigation.

And that’s just if you’re planning to stay with a site operator!

If you’d like to bring the project in-house, your accountant can do a cost-benefit analysis to see if it’s commercially viable.

They usually do this by checking a landowner’s financial resources and whether they have the right to terminate the tenancy.

The takeaway

We’re not saying that landowners can’t approach a wind farm extension with their own bank of knowledge.

But hiring a team of experts can make the job so much easier.

With a professional advisory team on hand to help, independent landowners can ensure a smooth transition to a new lease.

It can be tempting to use your years of experience to negotiate a deal. But we’ll be the first to say that having up-to-date expertise is never a bad idea.

Although we are currently seeing an error rate of approximately 85%, this is not typically the fault of your advisors.

More often than not, the data available to accurately check and keep on top of things simply aren’t easy to access.

Trust us, you’ll still be leagues ahead if you choose to engage with professional services that will give you peace of mind. If you’re not sure how to get started with a wind farm extension, get in touch with the team at Lumify Energy. We can work with your existing advisors (or as a standalone team!) to help you achieve the results you’re after.