Harvesting the sun—closing down a solar farm

Harvesting the sun—closing down a solar farm

What are the legal considerations when decommissioning a solar farm site? Sonya Bedford, partner and head of the renewable energy team at Stephens Scown Solicitors, explains how lawyers can assist in creating an appropriate decommissioning strategy.

Should solar farms be built with a decommissioning strategy in mind?

Yes. Planning will often state that the site is to be decommissioned if it is no longer generating electricity. The planning permissions are temporary, so it is vital that decommissioning is dealt with at the outset.

To date, local planning authorities have not been very specific about what form a decommissioning strategy should take. However, overall, any strategy needs to ensure that the site is fully restored to its former state. A schedule of conditions needs to be prepared at the beginning of the lease, and the strategy needs to ensure the complete removal of all equipment to a depth of one metre underground. Bonds should be put in place to cover the costs of removing the site, because taking the structures down will be expensive. However, it is expected the majority of solar farms will continue to operate rather than decommissioning—when leases expire, planning permission will be reapplied for.

How can lawyers assist in the creation of this strategy?

Lawyers can help in the creation of this strategy by adding terms into the lease which state what happens if the site is to be decommissioned—ie by creating a bond or escrow account for funds for the decommissioning or transfer of ownership of equipment and recycling. Developers should be members of PV Cycle, the scheme for end-of-life solar modules.

What could trigger the closure of a solar farm?

The loss of a subsidy or funding not being paid off—if the site has not been constructed correctly, advances in technology and poor maintenance could all trigger the closure of a solar farm.

What are the key legal considerations when looking at decommissioning/closing a solar farm?

It would be necessary to consider:

  1. the reinstatement bond
  2. ownership of equipment
  3. good operation and maintenance (O&M) contracts, and
  4. the valuation of the site during the term

Funds and deposits for restoration need to be in the names of both landlords and tenants, and controlled by both parties in an escrow account so that both have access. Neither party should have a right to renew the lease—it should just come to an end.

It is also important to look at the expiry of the planning permission to ensure any enforcement proceedings are avoided, or make sure that planning is reapplied for in good time.

In terms of the electrical infrastructure, this will belong to the local distribution network operator and as such will need to comply with the terms of the wayleaves and other agreements.

Sonya Bedford is a partner and head of the renewable energy team at Stephens Scown Solicitors. To date, she has acted in over 150 solar farm developments. She is also experienced in dealing with wind farms, wind turbine acquisition, anaerobic digestion, biomass and hydro, as well as with grid connection agreements and issues, funding of renewable energy projects and dealing with the energy protection certificates and O&M agreements for these sites.

Interviewed by Jane Crinnion.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.


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