Renewable Energy Developments – Has The Industry Got The Structure Right?

The industry has over the last few years adopted a conventional structure when documenting renewable energy developments. This involves the use of an option to take a lease . Under the option agreement the developer seeks planning permission for the development (be it wind, solar, hydro or other form of energy provision) and having been granted it (and sorted out his grid connection and any other restraint on development) he calls on the landowner to grant him a lease. Under the Lease, the landowner will be paid either or both of a percentage of gross income from the site when operational or a fixed rent per acre of land in the scheme, usually indexed in some way. The lease is usually a long one and contains both options to terminate early and also to extend for a further lengthy extension term.