ENERGY, WASTE & ENVIRONMENT
Shining a light on what you need to know Steven Cockcroft, a solicitor at Johns Elliot in Belfast, looks at the legal implications of partnering with a solar panel company.
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n recent years publicity surrounding opportunities for property owners to generate surplus energy for sale back to utility companies has led to an increase in the installation of solar panels on private properties under licence or lease. A typical solar panel scheme involves the property owner entering into a lease giving an energy company the right to install its own solar panels on the roof of the owner’s property. The panels remain the property of the energy company whilst the energy produced, and the benefit of any sales of surplus energy to utility companies, are shared with the property owner. These schemes raise a number of issues, not only for the property owner but also for third parties which have an interest in the property.
Planning & Statutory Approvals The Department of the Environment (NI) published a useful information leaflet “Renewal energy Development within the Curtilage of a Dwellinghouse – permitted development rights”. Briefly stated, planning restrictions have been relaxed in relation to solar panels fitted to pitched and flat roofs and to walls, subject only to certain restrictions where the property lies within a conservation area or similar. Building control approval for installations will be required, however, it is likely that regulations may develop to meet changing circumstances.
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to obtain a robust indemnity for any damage caused to the property.
Sale Unless the energy company agrees to remove its equipment, the solar panel lease will remain in place, and that any sale will be effectively subject to the solar panel lease. There are obviously practical concerns, specifically whether or not the existence of solar panels in a particular case increases or adversely prejudices the value of the property. Steven Cockcroft
Third Party Consents It is likely that all lenders will have included a provision in their standard mortgage stating that the lender’s formal written consent is required to the creation of any third party rights. A typical solar panel lease will provide that the energy company will maintain a policy of insurance in relation to the installation and maintenance of the relevant equipment.
Business Tenancies It is clear that many energy companies regard the arrangement as being a business lease falling within the terms of the Business Tenancies (NI) Order 1996. This Order gives a business tenant – in this case the energy company – the right to renew its lease when it comes to an end. This right applies to renewal both at the end of the contractual term of the lease and where the property owner (or lender) exercises a break clause to end the lease prematurely.
Conclusion The property owner should ensure that his interest – and the interest of his bank or building society – is noted on the relevant policy. It is essential that the insurance policy covers any damage caused to the property itself and injury to any third party or third party property. With regard to repair, the energy company will require rights of access, and the property owner should seek
Before entering into a solar panel lease, property owners should consult their solicitor and if the property is mortgaged, the consent of the bank or building society will be required. And it should be remembered that the presence of a solar panel on the property will affect its value and that there are significant repairing and insurance issues to be considered. In addition, don’t forget that it is likely to be difficult to bring the lease to an end.