The renewable energy development lifecycle
Select a section:
01. Landowner approach
02. Review with agent
03. Letter of authority & exclusivity
04. Heads of terms
05. Surveys & consultation
06. Option to lease
07. Planning
08. Lease
09. Construction
10. Operation
11. Potential disposal
01. Landowner approach
A landowner might receive a written approach and/or door knock from a developer detailing their initial proposal.
Get in touch
Interested in finding out your options for diversifying into renewables?
See more
See more
The agent will complete a detailed desktop appraisal of the site to identify opportunities and constraints.
02. Review with agent
See more
Availability and cost of a grid connection is key in the viability of an energy development, so establishing potential is crucial from the outset.
03. Letter of authority
& exclusivity
See more
Although not legally binding, the heads of terms are an important step in setting a precedent for the legal agreements as well as negotiating the commercial points of the deal.
04. Heads of terms
See more
Detailed site investigations, further survey work and appropriate community consultation to refine design and technology of the development.
05. Surveys & consultation
See more
Solicitors draft and agree the legal agreements for the development.
06. Option to lease
See more
Developers prepare a robust application to support the development through the consenting process.
07. Planning
See more
Landowner grants a lease to the developer over the land for the agreed term. It is at this point that the landowner will begin to receive a rent from the developer.
08. Lease
See more
The construction period of the development is likely to be one of the most disruptive and challenging times of the entire process.
09. Construction
See more
Throughout the lease term, the tenant will be responsible for all operation and maintenance of the development.
10. Operation
See more
The developer may sell the project rights or special purpose vehicle (SPV) of the development.
11. Potential disposal
1/11 Landowner approach in a renewable energy development
Get in touch
Interested in finding out your options for diversifying into renewables?
We have helped to facilitate the development of >25GW of energy generation and storage projects over the last 12 months
>25GW
Back to top
2/11 Reviewing a proposed renewable energy development with agent
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
The grading of land is a key consideration when assessing whether land is suitable for renewables.
03/11 Assessment of grid connection for a renewable energy development
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
We have helped to facilitate the development of 87,000,000 MWh of generation in the last 12 months
04/11 Heads of terms for a renewable energy development lease
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
5/11 Renewable energy development surveys & consultation
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
We have >4GW
solar projects under development
>4GW
6/11 Option to lease in a renewable energy development
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
7/11 Planning consent for a renewable energy development
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
Depending on the consenting route, a developer will be required to submit a robust planning application that supports and promotes the scheme.
For a local authority application, the developer can undertake a pre-application with the LPA (local planning authority) to discuss the
proposal and ensure the correct information is provided with the application. This will also help to inform the design of the scheme and any mitigation, such as landscaping, that may be required. The application would normally be determined in 13 weeks.
The timescale for examining a DCO application is set down in the legislation and is approximately 16 months from application to decision. Pre-application is in the control of the applicant but, on average, takes around two years.
If you haven’t been approached but think that your land might be suitable, you can still request a site appraisal by getting in touch with us.
If you’ve been approached, even if the terms seem favourable, it’s always worth reviewing these with an expert to make sure that you’re not missing out on an even better deal. See the ‘Review with agent’ section for more information on this.
In most cases, a renewable energy project will start by a developer identifying suitable land and contacting the landowner directly. This could be either in writing or face-to-face and will usually include details of the land and an introduction to the company, and sometimes an indication of the terms or payment that they might offer.
08/11 Renewable energy development lease
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
09/11 Construction of a renewable energy development
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
We have successfully advised on over 1,500 energy projects, on rural, commercial and industrial land and properties.
1,500
10/11 Operation of a renewable energy development
Back to top
We have >1.8GW energy storage projects under development.
>1.8GW
National policy seeks to protect the best and most versatile (BMV) agricultural land, so the Agricultural Land Classification (ALC) is a key consideration and usually land graded 3a or better will need justification to get planning for renewables.
land required ranges from two acres for battery storage to 200 acres for solar, plus access, landscaping and biodiversity enhancements. Solar developments over 50MW (around 200 acres) cannot be consented through the normal planning system and require a Development Consent Order (DCO), so will cost the developer more.
Once you’ve got in touch with us, we’ll carry out a detailed desktop appraisal of the site and surrounding area to identify opportunities and constraints (such as access or heritage assets), to ascertain the site’s viability for a range of technologies and Point of Connection (POC).
These variables all impact on costs and timescales. For example, the minimum
Find out more about BMV and ALC
The Agricultural Land Classification (ALC) system provides a method for assessing the quality of farmland in England and Wales, classifying into five grades, with 1 being the best and 5 being the worst. Grade 3 is subdivided into 3a and 3b. Grades 1-3a are considered BMV land. This information was collected in the 1960s
and revised in 1988 so it is important to undertake a soilssurvey early on, to ascertain the correct grading.
National Policy seeks to protect BMV land and directs solar farms to areas of lower grade land. If a proposal falls within an area of BMV land, justification would be required to support an application. This may include providing a Sequential Site Selection assessment to demonstrate it is a sequentially preferable site as well as highlighting the benefits of a scheme.
Agricultural Land Classification (ALC) and Best and Most Versatile land (BMV)
A budget grid application usually takes around 20 days, and a full grid application around 60.
request exclusivity whilst they secure grid capacity and land rights, which stops the landowner having conversations with other developers.
Grid is a key consideration, and there is high demand at the moment so it’s in the landowner’s interest to act quickly and allow the developer to submit their application.
Following initial feasibility checks, the next priority is availability and cost of a grid connection.
The developer will investigate, apply for and secure grid connection for the scheme. In order to have discussions with the Distribution Network Operator, they will require a signed letter of authority, and some developers will
Negotiations take place between the developer and the landowner’s agent, and this is where commercial terms (rent, success fees, lease premiums etc.) are agreed, as well as elements such as compensation, indemnity, crop loss, easements and access.
If no issues have been flagged through the feasibility checks and the grid connection investigations, the next step is to look at heads of terms. This is an important step, providing an outline agreement ahead of legal negotiations, but are not legally binding themselves.
Heads of terms are an important step but are not legally binding.
Prior to submitting an application, it is best practice in any case for a developer to carry out public consultation but, for a DCO, this is compulsory and must be carried out in a particular way. In this case, the process is heavily ‘front-loaded’ and involves a variety of stakeholder engagement methods. The proposal will then be in the public domain and the developer will support the
Developers undertake detailed site investigations, further survey work and appropriate community consultation to refine the development and support the planning application.
This will include some surveys requiring direct access to the land, including a soil survey for the ALC assessment, which may cause some disruption.
landowner to answer any questions from the public.
The supporting surveys and consultation will inform the proposals and identify if any further work needs
to be undertaken.
The Agricultural Land Classification (ALC) system provides a method for assessing the quality of farmland in England and Wales, classifying into five grades, with 1 being the best and 5 being the worst. Grade 3 is subdivided into 3a and 3b. Grades 1-3a are considered BMV land. This information was collected in the 1960s and revised
Agricultural Land Classification (ALC) and Best and Most Versatile land (BMV)
in 1988 so it is important to undertake a soils survey early on, to ascertain the correct grading.
National Policy seeks to protect BMV land and directs solar farms to areas of lower grade land. If a proposal falls within an area of BMV land, justification would be required to support an application. This may include providing a Sequential Site Selection assessment to demonstrate it is a sequentially preferable site as well as highlighting the benefits of a scheme.
The developer can then call for the lease whenever they are ready (see section 8: Lease), which means that you need to be able to ensure vacant possession, so you should consider notice periods of agricultural tenancies and other agreements.
Once agreed, during the option period, the developer will continue survey work and preparation of a planning application.
Before entering into an option agreement, it’s crucial to get specialist tax advice from an accountant, as this may have an impact on Agricultural Property Relief and inheritance tax.
Solicitors are then instructed to draft and agree the legal agreements for the development. It’s a specialist area, so it’s important that the solicitor has experience in renewable energy transactions.
The heads of terms are used as a baseline for further negotiations of the option and lease agreements.
It’s important to engage with an accountant prior to entering into an option agreement, as it may have tax implications.
We have provided planning consultancy across >210MW of energy projects and >36,000m of distribution network electricity cables in the last year
From that date, the landowner no longer has access to the land as they did previously, and there will be certain conditions and obligations to consider under the leasehold agreement.
The relationship between the landowner and the developer is formed as a landlord and tenant, with a formal leasehold agreement entered and exercised. The lease term is typically between 20 and 40 years, depending on the technology, with rent payable from the date of entry.
Once all consents (planning, grid connection, funding, etc.) are in place, the developer will exercise the option to lease. At this point, the landowner will need to grant the lease with vacant possession within the timescale agreed during the legal negotiations.
The lease would typically be 20-40 years, depending on the technology
It’s important to consider disruption not only to your own business activities, but also to local residents and occupiers of neighbouring properties.
Due to the Ukraine-Russia war, developers are currently seeing significant increases in material and shipping costs, and this has had a knock-on effect on rental income and premiums due to landowners.
Depending on the scale of the development and the technology, the construction period will be between six and 18 months.
This phase is likely to be one of the most disruptive and challenging times of the entire process – especially initially, as large materials are delivered to site.
Get in touch
Interested in finding out your options for diversifying into renewables?
However, given the long lease lengths, technology will have progressed, and a developer may wish to negotiate lease extensions.
On a solar farm, there is the potential for a landowner to have sheep grazing the site under a separate grazing agreement – if this is the case, insurance and liability should be considered.
At the end of the term, the agreement will require the developer to decommission the site and return the land to its previous state.
With construction complete, the development enters the operational phase. The tenant (developer) remains responsible for the operation and all maintenance of the development.
The planning consent may include requirements for landscaping or biodiversity enhancement, which would be the responsibility of the developer.
11/11 Potential disposal of a renewable energy development
We have transacted >£75m of energy assets in the last 12 months.
>£75m
During the process outlined above, the developer may look to sell the project rights or special purpose vehicle (SPV) of the development to either other investors or an operation and maintenance developer.
The landowner cannot prevent this from happening, but the lease should provide for an assignment fee to be paid to the landowner in this event.
Get in touch
Interested in finding out your options for diversifying into renewables?
Back to top
Get in touch
Back to top
This page is best viewed on desktop