Farm Online: Farmers taking yearly payments as one upfront sum
Landowners are taking their cash windfall from a renewable energy project and retiring from farming. Superannuation funds are bankrolling a scheme where the lease money paid over many years to host a project like wind or solar farms is bundled up into one upfront payment.
It is often worth many millions of dollars to landowners without the need to sell their farms. While some are taking the money to retire, others are using it to plan their farm succession, pay down debt or even using it to buy more land and grow their business.
This is the experience of a Sydney-headquartered company, RELA, a renewable energy platform which has been working over the past three years to connect landowners with institutional capital and developers.
RELA’s model gives landowners the opportunity to receive lease payments upfront in one lump sum rather than over a long lease period.
More and more rural land owners are cashing in on the renewable energy bonanza.
Wind and solar farms typically have a life of about 25 years. Long-term leases can smooth out the peaks and troughs of farming for a generation or more.
Many farmers are today actively exploring renewable energy network plans to cash in. RELA’s business is experiencing the rapid growth you might expect given the drive to renewables. It has teamed with several super funds to provide the upfront payments and negotiate the lease arrangements with developers.
“A lot of landowners in our experience aren’t aware of their own bargaining power,” RELA director Eran Rimmer said.
“A willing and motivated landowner can create a real head of steam.”
A landowner in south east Queensland’s Yarranlea Solar Farm recently finalised a life changing upfront lease prepayment of their renewable energy ground lease.
The deal was worth millions.
Belinda Saal said she was “ecstatic about the outcome” which gives them buy more land “as opportunities arise”.
Companies like RELA say energy companies are getting better at negotiating with farmers for the large areas of land which has often put farmers in the driving seat.
Farm lobby groups say farmers deserve to be fairly compensated for providing the land to move Australia from coal to renewables.
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