Structuring Solar PV Agreements: Negotiating Real Estate Entitlements and Offtake Agreements

Description

Government incentives have sparked growth in the renewable energy industry, including an increase in solar PV energy development. To take advantage of the recent events, solar energy project operators must secure real estate rights and negotiate offtake agreements to ensure the necessary rights to finance and develop a successful solar PV project.

Solar energy projects require long-term real estate entitlements, such as easements or leases, to ensure unobstructed, direct access to sunlight for efficient operation. Solar easements enable property owners to install solar PV panels and related equipment and give project operators the right to use the airspace above their land to access direct sunlight.

The easement will vary depending on the solar energy system and the landowner involved. Leases offer similar protections, although they may lack some of the long-term benefits of easements.

Counsel must carefully negotiate critical provisions in each real estate agreement, including scope, terms of revision, and compensation. Further, counsel must evaluate considerations such as zoning regulations and restrictive covenants before executing the real estate entitlement documentation.

Practitioners must understand the fundamental concepts and best practices for negotiating and structuring offtake agreements, such as a PPA, which should be closely related to the real estate entitlement agreement and provide project developers, tax equity investors, and lenders the necessary assurances of long-term energy revenue to support the project.

Listen as our authoritative panel of practitioners discusses the primary components of a solar easement, as well as considerations to weigh before entering into any offtake related agreements. The panel will offer best practices for negotiating and structuring the easement agreement.