Solar farms - what you need to know before you sign the dotted line

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Jillian Godsil

Planning permission for over 220 solar farms has been made since June 2015, as more and more companies look at establishing solar farms in Ireland.

Typically solar farms tend to be for a minimum of 25 acres although this size is growing to the hundreds and most of the planning applications have been in Cork, Wexford and Meath.

In most instances, solar farms are where land is leased by a Renewable Energy Developer from a land owner and the developer will install rows of ground-mounted solar panels in the field.

The panels tend to be 2.5m by 4m and the panels are laid out in rows and slanted south facing.

As they require maintenance there are gaps between the panels allowing grass to grow and allowing sheep grazing. Cosmetically the ground-mounted panels are not easily visible and can easily be disguised by growing a hedge around the perimeter of the field.

What size is a typical solar farm?

Initially, developers were seeking land parcels of between 25 to 30 acres which equate to 5 megawats of electrical energy.

However, according to IFA renewables chairman James Murphy, more recently the trend is for land owners to be asked to sign agreements for significantly larger plots of land – in some cases in excess of 150 acres.

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Are they any current solar farms in Ireland?

There are no operational solar farms in Ireland currently although there are some 27,000 acres under contract and option agreements. There has been however planning permission granted for the first solar farms, including one based in Wexford.

Are communities involved?

Not as yet. There are submissions to the Department of Communications, Climate Action & Environment outlining possible guidelines on how to involve communities but these are not in place yet.

Minister Denis Naughten publicly stated at the Energy in Agriculture conference in Gorteen on August 22 that there were concerns that in the past developers were allowed to get away with not engaging with the local community. Naughten stressed that he wanted early and meaningful engagement by developers with the local community.

It was a stated goal of the Department that energy developers offer communities a buy-in option to renewable energy projects.

Does Ireland have solar targets?

Ireland has signed up to renewable energy targets for 2020 for electricity renewables, heating renewables and transport renewables.

According to David Maguire, founder and chairman of The Irish Solar Energy Association (ISEA) we may reach the electricity renewables target but not the other two. Maguire reckons we will face a shortfall of 2.5pc in renewables, which could translate into penalties for Ireland in region of €300m and rising. So on the government side there is an urgency to put legislation in place. Maguire and his organisation are advocating for urgency to clarify incentives and price in order to minimise the penalties.

What kind of financial incentive will be in place?

This is not as yet known. Ireland is the only country in the EU without any state incentives currently. At the Gorteen conference Minister Naughten acknowledged the delay in confirming what REFIT tariff will be introduced.

Where is the best land for solar farms?

Contrary to popular opinion, solar farms do not need sunlight but just daylight. During the summer months Ireland has longer hours than other traditionally warmer climes. 

Solar farms are currently in place as far north as Northern Ireland. In fact, the first licensed solar farm on this island is beside Belfast airport. The ISEA says that while the south east of Ireland is deemed ideal for solar farming, it is possible to implement solar farms across the whole island.

What else favours the position of solar farms?

Proximity to ESB sub stations is very popular as it reduces the cost of connection and distribution of energy into the grid. Developers prefer between one to two kilometres from the nearest ESB substation, according to the IFA.

How long are the contracts?

Typical contracts tend to last between 25 and 30 years. The length of the contract is important as it will impact future generations on the farm. The IFA advises engaging a solicitor experienced in renewables to oversee this negotiation.

James Murphy emphasises this is a decision that needs to be made within the family unit, with special consideration for children who might wish to farm in the future. Most contracts will have ‘make good’ clauses which will return the land back to the prime condition in which it was first leased.

What are Option Agreements?

These are legally binding agreements. The option refers to the developer only. They are normally for between two to five years giving the developer exclusive rights to proceed with a solar farm or not. Again the IFA advises all farmers seek legal advice before signing any option agreement as firstly they are binding and secondly the formal leasing contract normally derives from the option agreement. It is vital that the terms are laid out as fairly as possible as retrofitting terms favourable to the farmer is extremely difficult.

What price can you expect per acre?

Most farmers are hesitant to disclose the amount per acre according to Murphy. As a rule of thumb however, he suggests that €1000 an acre per annum would appear to be the going rate.

What are the tax implications?

The IFA advises any farmer looking to lease their land to check with their accountant as additional income will have to be declared.

What’s this about solar farms being designated commercial?

Ireland, unlike other EU, countries has stated that solar farms are commercial. This differs from forestry or wind farms. There are submissions currently before Revenue to argue this case by Maguire and the ISEA. Maguire has frequently highlighted his concerns about this unique anomaly. If Revenue persists in this declamation, this could have serious implications for owners of solar farms who in the future might wish to leave the farm to their son or daughter and they might not be able to avail of Capital Acquisition Tax relief.

Can basic payments be collected on a solar farm?

The Department of Agriculture has yet to release confirmation as to whether land under solar farms will qualify for the BPS payment. Murphy is currently calling on the Department to fully clarify its ruling on this point.

Is there a regulating body/bodies?

For more information there is the Solar Energy Association of Ireland or you can contact James Murphy in the IFA who is the renewables and alternative landuse chairman.  

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