5 things every farmer should do before signing a solar energy contract
Solar energy could present an opportunity for farmers to generate an off-farm income, IFA Renewables Project Team Chairman James Murphy has said.
At a recent solar energy seminar organised by IFA, he said that while there are good reasons to be optimistic about solar energy in Ireland, farmers should exercise caution when signing up to any agreement.
There are several things that farmers should consider before thinking of going into solar energy and signing an agreement:
1.Read the documentation
There will be agreements to sign should you decide to venture into solar energy on your farm, so it is important that you read all the documentation that you will be signing.
An exclusivity agreement will be something a farmer will need to sign should they decide to bring solar onto the farm.
An exclusivity agreement gives the right to a company to apply for a grid connection in their name and it is a legally binding document.
It allows the company onto your lands to carry out investigations and also allows them to apply for a grid connection, according to James Staines of Kennedys Solicitors.
An option agreement, which may also be signed, allows the solar farm developer to lease the land. Therefore, if the developer requests that you sign an option agreement you are legally bound to sign the lease.
It is advised that you read the documentation and be aware of what you’re signing. Once an option agreement is signed you can’t negotiate it.
2.Get legal advice
IFA Renewables Project Team Chairman James Murphy has said that it is important that you get independent legal advice before you sign anything.
He advises farmers to go to a legal expert with experience in dealing with renewables contracts and said that this may not always be your family solicitor.
“You should get someone that has first-hand experience in dealing with these sort of contracts. If you’ve any doubts, find a solicitor comfortable in dealing with these contracts.”
3.Research your company
There are plenty of companies out there to choose from and the advice is to check the history of their previous projects out.
Murphy advises researching the companies before you decide on one. He said that a list of questions should include the companies past experience and if they have any references from previous clients.
Furthermore, he said to know your point of contact with the company you choose to develop your solar farm.
4.Talk with your family and neighbours
It is recommended that you talk to your family before installing a solar farm as it will have a long-term impact on your farm.
Staines said that “you’ll be looking at this for 30 years, so you should get it right”.
Meanwhile, in advance of lodging a planning application the IFA Renewables Project Team Chairman said to remember your neighbours when you’re thinking about a solar farm.
In advance of lodging a planning application, there should be active engagement and consultation with the local community by the development company.
Murphy said that farmers should encourage the company to offer community part ownership however, this must not be at your expense.
He said that 25% of each project should be offered to the community, for ownership once its built out and 1% of the turnover should be invested back into local communities to support rural regeneration and employment.
5.Get it in writing
If you decide to diversify into solar farming, farmers should get everything they agree on in writing – side deals or agreements don’t count if they’re not in writing, according to Staines.
“If something isn’t written down in the lease then it doesn’t exist.”
Furthermore , it is advised that if you’re going to sign any agreement, ensure that you keep a note of all meetings or discussions.
The key advice is to know what you’re signing – if it isn’t written in the agreement then it isn’t legally binding. Also if something is written in the agreement and you sign it, then you are legally bound by it.