Landowners hosting large-scale renewable energy developments are the target of a new range of investors looking to access green income. At present, there is real investor frenzy in solar photo voltaic (PV) investment, but companies are typically focusing on three- to four-megawatt (MW) projects producing significant rental incomes in anticipation of planned supports for the solar PV sector. The level of understanding among farmers is little to none and can often lead to panic when they are approached by developers.
Renewable-energy projects such as solar PV and wind will require farmers to enter legal agreements with project developers in order to bring a project to fruition. Legal agreements only work where there is a good relationship between the landowner and the developer. The project is effectively a partnership that has to be worked on by both sides.
The exclusivity agreement is usually a very short-form document that outlines the site with reference to a map and establishes their interest in developing a solar project. Bearing in mind the fact that the developer will have to invest time and money in the investigative element of a project proposal, the developer will want the landowner to sign an exclusivity agreement stating that the landowner will not talk to anybody else for some period of time.
If the landowner is in discussion with other third parties, they are required to cease those discussions and agree to be confidential with any discussions the landowner has with the developer. In some cases, there is no exclusivity agreement at this stage and it is sometimes built into a later-stage heads of terms.