Farmers warned over hidden legal risks in solar deals
Farmers being approached over solar, battery storage and wind schemes are being urged to check the small print before signing deals that could leave them exposed to hidden costs.
Simon Rounding, Head of Rural at Pepperells Solicitors, said many farmers were being approached with renewable energy proposals as diversification becomes increasingly important to farm businesses.
But he warned that some landowners were leaving it too late to seek legal advice before signing terms that may not protect their interests.
According to Defra figures cited by Pepperells Solicitors, more than 71% of farming businesses in England now have some form of diversified activity, up 10% since 2015.
Solar and renewables are the second most common form of diversification, with 27% of farm businesses now generating solar energy, up 9% since 2016.
The warning comes as filming begins for series six of Clarkson’s Farm, which has brought renewed attention to the financial pressures and diversification challenges facing farm businesses.
Recent episodes have followed Jeremy Clarkson’s efforts to diversify Diddly Squat Farm, reflecting a wider industry trend as farmers look for new income streams amid rising costs.
Mr Rounding said the programme had helped viewers better understand the commercial pressures involved in running a modern farm, adding: “Clarkson's Farm has been genuinely valuable in showing the public that farming is not a simple life.”
He said the practical challenge of making a farm financially viable was something he saw “playing out in real legal situations every single week.”
Mr Rounding said the growth of renewables had prompted more commercial promoters to approach landowners with proposals for solar arrays, battery storage and wind installations.
While many of these schemes appeared legitimate, he warned that farmers could be pressured into signing terms before taking advice from solicitors, land agents and accountants.
He said more farmers were being contacted by “pushy” sales operators who encouraged them to move quickly.
“Farmers are being approached with proposals, most of which are perfectly legitimate on the surface,” he said.
“But the terms that come with them are not always drafted with the farmer's best interests at heart.”
One recurring concern involves uncapped third-party costs linked to access and grid connections.
Mr Rounding said this could arise when a promoter needs to negotiate an easement across a neighbouring landowner’s land to run a cable from a solar or renewables site to the grid.
If those costs are deducted from the farmer’s payment and are not capped, the final return can be significantly reduced.
“The promoter will say he will negotiate costs,” he said. “But he has no real incentive to drive a hard bargain, because it is not his money.
“If that cost is not capped, the farmer can find their expected return significantly reduced, and by the time they realise, the deal is already too far down the road.”
Mr Rounding said farmers considering solar panels, battery storage, wind turbines or other schemes should involve professional advisers before signing any documents.
He said heads of terms can set out the basic deal structure and limit a farmer’s room for negotiation once signed, making early advice essential.
“Once you have signed the heads of terms, your options are much more limited,” he said. “The time to make sure the deal works for you is before you put pen to paper.”
His message to farmers was to treat legal, land and tax advice as part of the cost of the project, rather than something to arrange after terms have been agreed.
Mr Rounding said diversification was increasingly important for many farm businesses, but warned that not every deal would deliver the return farmers expected.
“Diversification is often essential,” he said. “The income from traditional farming alone is simply not enough for many families.
“But a deal that looks good at first glance can look very different when someone takes the time to read every line of it.”
