jump
straight
to a
section
1/5
What’s different about the promotional model?
2/5
What are the potential
returns?
3/5
What are the key requirements for solar and battery development?
4/5
What’s the process for developing
a project?
5/5
How do I start
the process?
1. What’s different about the promotional model?
2. What are the potential returns?
3. What are the key requirements for solar and battery development?
4. What's the process for promoting a project?
5. How do I start the process?
What’s different about the promotional model?
Maximum
value
Promoters
risk
Net proceeds
are shared
Open market
Promoter acts on the landowner’s behalf and uses its specialist skills and experience to optimise the value of the site.
The promoter takes the land through the planning process at its own risk.
Once sold on the open market, the promoter shares in the net proceeds after the costs of promoting the land have been deducted. The landowner also benefits from the annual ground rent.
Unlike option agreements offered by developers, with a promotion agreement the project is marketed and sold to the highest bidder
What are the
potential returns?
Developers and operators of solar projects will typically pay between £850 and £1,000 per acre per annum in land rent (for a 30 to 40-year term), plus a nominal option fee during the development period before lease.
What are the key requirements for solar and battery development?
Solar: 80+ acres
Battery: 0.25+ acres
Ideally Grade 3 or 4 land
Grade 2 considered
Close to a substation or overhead power cables
Free from
constraints
Anywhere in
England and Wales
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What’s the process for
promoting a project under this model?
Initial assessment
Grid
investigations
Promotion
Delivery/
disposal
By simply sending a plan and other relevant details, the promoter will be able to assess whether the landowner’s site has potential.
Following this, a signed letter of authority will facilitate discussions with the network operator - this is crucial, and time is of the essence!
Once authorised, we liaise with the Distribution Network Operator (DNO) to determine grid capacity (import and export), make a grid application and consider the offer.
The results of this stage will determine the type and scale of the project and provide a frame of reference for the promotion agreement.
Depending on the outcome, the promoter would agree and enter into the promotion agreement, aligning its interests with the landowner, and accept the
grid offer.
- Prepare technical surveys to
support due diligence
Once the planning permission has been granted, the disposal strategy would be agreed with the aim of selling the entire share capital in the SPV – before the scheme
is built.
The strategy would be agreed between the promoter and the landowner to optimise the capital receipt through a competitive open market process.
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- Resolve the size, form and
other requirements
- Hold pre-application discussions
the local authority
- Technical surveys to support
planning application
- Prepare technical and ecological
surveys to support the planning
application
- Submit planning application
- Agree legal documents and
land rights in concert with
landowner partner
How do I start
the process?
Email me
07969 354368
Partner, Head of Energy
Charles Hardcastle
If you have further questions or would like to submit a site plan for an initial assessment, contact us.
Initial assessment
GRID
INVESTIGATIONS
Promotion
DELIVERY/
DISPOSAL
MAXIMUM
VALUE
PROMOTERS
RISK
NET
PROCEEDS
ARE
SHARED
OPEN
MARKET
Rental returns
How the market works
Some developers will sell the project rights (grid connection, planning permission and option to lease), before construction, either on the open market to another developer, or to a group company that builds and operates the solar farm. The proceeds of project rights sales fund their development businesses, ultimately allowing them to source and develop more solar projects. It is unusual for a landowner to benefit from a share of this sale revenue, which is known as the developer premium.
The promotion agreement model provides the landowner with the ability to share the developer premium with the promoter, enjoying greater alignment as both parties are incentivised to maximise the proceeds. This developer premium could amount to a capital payment of >£500k to the landowner, in addition to the market rent.
Capital returns
The principle is the same with a battery development, similar development premiums are available for distribution through the promotion agreement structure.
Land rents for batteries are typically £2,000 to £2,500 per MW.
- Incorporate Special Purpose
Vehicle (SPV) company to hold
the project rights
- Provide a data room on all
technical matters
Get better RETURNS and more control of your energy project THROUGH promotion agreement
Email me
07920 861774
Energy & Infrastructures
Harry Robertson
Get better returns and more control of your energy project through a promotion agreement