Rents for new large scale wind farm sites under renewable obligation certificates rose by 10% between 2009 and 2010, says Scottish agent CKD Galbraith.
The owners of some of the earliest sites to be developed can expect significantly higher rental returns after reviews which are now approaching, says the firm, which has advised on more than 850MW of wind farms across 100 assignments in the last 10 years.
Between 2002 and 2008, rents under new leases increased on average by 200%. Early indications for 2011 show that they are continuing to rise as demand for available sites increases, said the firm’s Mike Reid.
“A lot of wind farms don’t have open market rent reviews, but are tied to RPI for 10 or 12 years because developers would find it hard to raise finance on open market rent agreements,” said Mr Reid. Rents in England were generally higher than in Scotland because sites were less remote.
It was very important to understand that terms varied widely and this included option agreements which often did not reflect up to date figures so it was important to seek advice to secure optimum payments, he said.
Decisions should not be made based on headline figures, but on the whole offer. For example, some option agreements tied landowners in to negotiating exclusively with one developer.