Business Clinic: Should I lease my land for battery storage?

Whether it’s a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.

Here, Eve Laws, a partner in Thrings’ agriculture and clean energy teams, advises on what to consider if battery storage may be an option on your land.

See also: Business Clinic: neighbour may be encroaching on our land

Q: I own and run a farm and have a 1ha parcel of unused arable land that I am keen to make the most of.

Having spoken to friends, they suggested I consider leasing it for battery storage. What do I need to be aware of?

A: In principle, this sounds like a great idea. Battery storage schemes can be ideal for smaller plots of land that wouldn’t be sufficient for solar farms or similar renewable projects.

They can give you a steady income from the rent for 30 or more years and they are considerably more profitable per hectare compared to solar parks.

As the country continues its acceleration towards net zero, battery storage projects will become increasingly important to the delivery of clean energy.

Landowners ready to support these schemes will play a vital role in this work, supporting grid stability and storing excess renewable energy.

Whether your land will be suitable for a battery project will, however, depend on where it is located.

Ideally, the land should not be adjacent to or located within a national park, nature reserve, or site of special specific interest.

The land should be near an electricity substation and in a non-residential area as the project will likely increase the level of background noise.

This can be mitigated to an extent with acoustic fencing, for example.

If you are comfortable that your land is suitable, there are several specialist agents you could approach who may put your land forward to developers and help you negotiate commercial terms.

Advice before signing

Before you sign any agreement, we recommend that you take advice from solicitors who deal regularly with this sort of project, as the legal documentation is complex, and care must be taken to ensure a fair balance is achieved between the developer’s and the landowner’s interests.

Your solicitors will, for example, ensure the rent payable is clearly defined so that you also benefit from any advances in technology and improvement in performance which increases the operator’s profits.

They will also confirm from the outset that the developer is responsible for site maintenance and decommissioning and that they provide you with sufficient security through the life cycle of the project until the land is reinstated.

It is important to understand the full life cycle of the scheme, from planning to decommissioning, as this will help provide vital context on timescales and give you a better understanding of the commitment you are taking on.

Delays can be an issue as you wait to get your connection to the grid. This could be up to anywhere from five to nine years and even then, there is no certainty it will go ahead.

Check option terms carefully

As such, make sure that you have the benefit of early termination provisions in the option agreement so that if it transpires in due course there is no realistic prospect of the battery project proceeding you are not “sitting in contract” indefinitely and can pursue other opportunities for the land that may come your way.

In any option agreement, negotiations around timelines as well as payments from the developer, indemnities and insurance are all important points to consider.

You should seek advice from legal, financial and other professional experts to ensure the project is providing you adequate compensation and protection.

You will also want to make sure you are protected if multiple landowners are involved.

Developers will often seek uniform agreements, but this might conflict with the priorities and future plans each of you has for your estates, so ensure these have been checked.

Do you have a question for the panel? Outline your legal, tax, finance, insurance or farm management question in no more than 350 words and Farmers Weekly will put it to a member of the panel. Please give as much information as possible. Email your question to FW-Businessclinic@markallengroup.com using the subject line “Business Clinic”.