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Leasing land to an energy company…is it worth it?

Sara Hatcher and Julian Peters

With climate change and fossil fuel costs on the rise, Australia’s focus on renewable energy is increasing.

Investing in solar and wind farm technology is becoming more enticing. It’s tempting to jump on board with a developer and have a solar or wind farm developed on your property. The leases are long, securing income for your family for years to come, and you’re contributing to a more sustainable future for our nation.

Sounds like an obvious choice, right? After all, what could possibly go wrong? It turns out, plenty.

Here’s seven potential pitfalls you should consider before entering into an agreement a developer.

  1. Land usage: Developers may seek a greater portion of your land than what they need, potentially impacting your farming operations or residence. Careful consideration is needed to avoid unexpected disruptions.
  2. Project timeline: The process of obtaining approvals and funding for the wind or solar farm can take years. You should determine compensation for the developer’s access to your land during this period and establish cancellation or transfer rights.
  3. Access and land protection: Minimise harm to your land by addressing issues like contamination, erosion, and invasive species. Ensure the agreement includes provisions for remediation and suitable access routes.
  4. Payments: Negotiate payments with the developer, taking into account factors such as the number of turbines or panels, energy generated and the potential for efficiency improvements over time. Protect against inflation and efficiencies resulting in decreasing payments in the future.
  5. Outgoings: Consider potential increases in costs like rates, land tax, insurance, and changes in land zoning. Fairly allocate these costs in the agreement to avoid disadvantages.
  6. Community impact: Assess the impact on the community, including noise, glare, and increased traffic. Seek restrictions or obligations on the developer to address these concerns.
  7. End of project: Plan for the decommissioning of the project and the restoration of the land after the agreement ends. Ensure responsibilities, obligations, and a decommissioning fund or guarantee are in place to cover these costs.

Want to know more? Get in touch.

Russell Kennedy’s renewable energy team can help you handle negotiations and ensure all considerations are properly addressed and documented.

Contact Sara Hatcher or Julian Peters for a confidential discussion. 

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