- Providing land for photovoltaic farms makes it possible to generate profits from land where cultivation is impossible or unprofitable.
- Leasing land for photovoltaics can earn up to PLN 20,000/year, but this amount is intended to encourage landowners to lease. The amounts are lower and depend on whether the plot meets specific investor requirements.
- The formalities associated with obtaining building permits for PV installations can take several years. Not all companies offer payment of wages during this transitional period or compensation for starting construction before the crops are harvested.
- The most doubts are raised primarily by tax and inheritance issues, and after the contract ends – those related to the demolition of the installation and the re-conversion of the land into agricultural use.
Leasing land for photovoltaics is one way to use poor quality land. Farming on class IV or lower soils often requires huge amounts of labor, and the profit remains uncertain.
Making them available for a PV farm brings steady revenues for the next few decades. It is understandable that when signing a contract for such a long period, doubts and questions arise. We answer the most common ones.
Leasing land for photovoltaics can earn up to PLN 20,000/year, but this amount is intended to encourage landowners to lease. The amounts are lower and depend on whether the plot meets specific investor requirements.
Let's not forget about the indexation of the land lease agreement for renewable energy. More about that in the article below.
Read more
And what investor requirements have a decisive influence on the amount of rent?
The beginning of cooperation. How to check if your plot meets the requirements?
This is the first, basic question that a landowner asks himself. The easiest way to determine whether a plot of land is suitable for leasing for a solar farm is to contact a company that professionally handles the entire process and has the necessary knowledge and tools. Many issues can also be checked on your own.
It is worth starting by determining whether there are ponds, rivers, trees that cannot be cut down, buildings less than 100 meters away or large differences in the height of the terrain on the given land. This makes it much more difficult, and often even impossible, to build a photovoltaic farm. The owner of the land certainly also has knowledge about the quality class of their land. If not, they can check it at the commune office and get the appropriate extract and drawing. The construction of the installation is only possible on land of class IV or lower and on meadows or wastelands. It is also important to determine whether there are any forms of nature protection on the site. In the interests of the environment, it is necessary to maintain an appropriate distance from them. Determining the level of groundwater may be more difficult. Such information can be obtained from the Polish Geological Institute – says Alicja Piątek, director of photovoltaic project development at Axpo in Poland.
Owners of agricultural land often wonder whether instead of leasing, the land for the power plant can be sold. In Poland, this is a very complicated and time-consuming process, mainly for legal and tax reasons.
Some people also think about buying a plot of land to make it available for a PV farm. This is possible, but in such a case the whole process would be burdened with a lot of risk. There can always be unforeseen obstacles that will prevent construction.
Moreover, the Act on the shaping of the agricultural system states that the purchaser of agricultural real estate is obliged to run the agricultural holding, which includes the purchased agricultural real estate, for a period of at least 5 years, and in the case of a natural person, to run the holding personally. During this period, the real estate cannot be sold or given into possession to other entities.
Read more
Animal transport regulations need a smart compromise
Preliminary agreement. How long do the formalities take? Is the lease fee paid during this time?
Another important issue is the waiting time for the decision to build a farm and the possibility of cultivating the land during the period of completing the formalities related to construction.
The entire process of checking the land and obtaining the required permits and decisions giving consent to build the farm takes about 3-5 years . That is why it is so important to secure the possibility of cultivating the land until the construction of the investment begins. Such a provision should be included in the preliminary agreement together with the obligation to pay the agreed remuneration during this period. It should also be remembered that the construction of the PV farm should begin immediately after receiving all the required decisions. Therefore, there is a risk that the investor's work schedule will force the construction work to begin before the agricultural crops are harvested. It is worth ensuring that the agreement includes provisions on the investor's obligation to inform the lessor in advance of the planned construction start date. Unfortunately, sometimes, despite obtaining such information, it is impossible to avoid damage to crops. In such a case, a provision in the agreement stating that compensation for agricultural crops, in proportion to the actual losses incurred, may be helpful – comments Marta Rogoyska-Wieczorek, legal advisor at Axpo.
Another very important issue for the landowner is the need to pay property tax. This obligation lies with him, but some companies that lease land for installations reimburse the costs incurred in this respect.
Read more
The actual lease agreement for photovoltaics. What happens in the event of the death of the landowner?
After the construction of a photovoltaic farm, during the 29-year cooperation, many unforeseen events may occur. One of them is the death of the owner of the leased land. As it results from the provisions of the law, the agreement signed for the lease of a plot does not automatically expire upon the death of its owner.
All property rights and obligations of the deceased pass to one or more people who receive it as an inheritance. In the event that the heirs would like to sell the land and divide the property, the right of first refusal usually belongs to the family of the deceased and then to the company that owns the PV installation on the leased land.
It should be remembered that building a photovoltaic farm involves huge costs, which is why companies protect themselves against premature termination of the installation's operation period.
Read more
Termination of Lease Agreement. Who is Responsible for Demolition and Recycling of a Photovoltaic Installation?
The end of a land lease agreement can end in several ways. One option is to negotiate the terms and conclude another contract with the owner of the PV installation. If the owner has other plans for the use of the land, the process of dismantling the photovoltaic farm begins.
When signing the lease agreement, it is worth ensuring that all costs and formalities related to the removal and recycling of the panels, as well as the conversion of the plot back to agricultural land, are borne by the company that used the land to lease its installation.
In conversations with landowners, questions often arise about the impact of the installation on the environment, animals, the land itself or local residents. Photovoltaic farms do not have a significant impact on the soil and water conditions of the area where they are located, because building a solar power plant usually does not require deep foundations. The low level of interference with the natural environment is due to the non-invasive assembly structure, usually in the form of piles driven into the ground. After dismantling the installation, the area will not be significantly disturbed and it will be easy to prepare it for another investment – explains Alicja Piątek, director of photovoltaic project development at Axpo in Poland.
– The investor is responsible for the dismantling and recycling of the solar power plant. It concludes agreements with external companies that specialize in recycling photovoltaic panels and other components, which allows for the recovery of valuable raw materials. Thanks to this, the process of dismantling the power plant is carried out in accordance with regulations and minimizes the impact on the environment – adds Marta Rogoyska-Wieczorek, legal counsel at Axpo.
Read more
Developers' hunger for land. Changes are coming to agricultural plots in cities
