The introduction of the original government incentives for rooftop Solar PV installations gave rise to booming levels of activity for a relatively short and intense period-of-time, the result of which was an abundance of so-called ‘rent-a-roof’ arrangements on large industrial premises.
The introduction of the original government incentives for rooftop Solar PV installations gave rise to booming levels of activity for a relatively short and intense period-of-time, the result of which was an abundance of so-called ‘rent-a-roof’ arrangements on large industrial premises.
While the first green shoots of a sustainable resurgence are visible within the sector, the absence of clear guidelines and established practice during the original bubble has left a potentially problematic legacy for prospective buyers subsequently seeking to acquire industrial assets with solar pv installations in place, as well as their lenders.
Prospective buyers of industrial assets with such installations in place will need to take advice on numerous practical, commercial and legal issues associated with this type of installation, which introduces unique considerations for lenders.
Furthermore, such buyers purchasing these buildings with finance can be faced with grey areas and little certainty, or even predictability in terms of lenders’ attitude with industrial premises subject to ‘rent-a-roof’ arrangements being appraised on a case by case basis, with little consistency in approach. A great deal will depend on the skill employed in drawing up and negotiating the original agreements, and the commercial deal struck by the original parties.
Buyers who are looking to acquire with third party finance, or who may wish to use their property for security in the future, will need to be satisfied that the installation and any contractual structure in place will be acceptable to lenders. Buyers should consult their lender/potential lender as soon as possible prior to exchange to ensure that specific requirements are satisfied in advance of completion.
While the acquisition of or lending against industrial premises with rooftop Solar PVinstallations in situ will certainly complicate the sales process, with the right advice the challenges can be navigated.
Paul Burton, real estate partner, JMW Solicitors
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