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LEGAL ADVICE T
AARON MOORE, CLEAVER FULTON RANKIN, EXPLAINS THE IMPLICATIONS OF LEASING
GREEN ENERGY PRODUCTS…
ALTERNATIVE
ENERGY
SUPPLIES future
considerations
for Northern
Ireland
A
s energy prices increase and the
average family in Northern Ireland
continues to experience a tightening
of its disposable income, it is not surprising
that individuals and businesses alike have
started to investigate means of reducing
their energy costs.
This, coupled with the perceived availability
of Government grants and the perceived
reductions to one’s carbon footprint, means
that the roof tops of Northern Ireland are
starting to change in appearance.
The advancements of solar panels, mounted
wind turbines, heat exchange systems
and ground-source heat pumps should
encourage all parties - suppliers, installers
and owner occupiers - to pause for thought
and ensure that they are best protecting
their interests during their green crusade.
EXAMPLE
Company X has contracted with homeowner Y or business Z to install solar panels
to its residential or commercial premises.
The usual arrangement involves the end
customer entering into a lease which gives
the supplier the right to install its own
product on the premises. That product
may be solar panels, wind turbines or
other energy saving devices. The product
remains the property of the supplier, whilst
the energy produced and the revenue
generated from it is usually shared with the
end customer.
There are, however, a few potential issues
for all parties involved.
Whilst this matter is yet to be tested in
our courts, it may be safe to presume that
an agreement between the owner of the
premises and the supplier of the product
would be protected by the Business
Tenancies (NI) Order 1996. If this is tested
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and the courts accept the above to be the
case, the supplier of the product will, in
effect, have security of tenure. This would
mean that each time the lease came to
an end, the supplier would be entitled to
apply for a fresh lease and the owner of the
premises could only defeat that application
if they fell within one of the exceptions in
the legislation. For example, if they were
intending to redevelop the lands and
required possession of the same for that
purpose.
The Northern Irish position differs to that in
other jurisdictions in that the tenant, here
the supplier of the product, cannot contract
out of the security offered by the legislation.
For this very reason, suppliers and the
owners of premises may find that mortgage
providers in Northern Ireland will be more
reluctant to allow the owner of the premises
to enter into such arrangements.
IMPLICATIONS
Equally, the supplier of the product should
be careful to consider how the owner of
the premises legally holds the same. If the
owner holds his premises under a long
lease, he will enviably be subject to various
covenants and conditions. If he were to
breach those, his ultimate landlord may be
entitled to forfeit the lease. If the head lease
is forfeited, then the sub-lease to the energy
supplier will equally be brought to an end.
The above are only two of a series of
examples of situations which may arise within
this jurisdiction.
If you are an energy supplier or if you are the
owner of a premises and you are considering
the installation of an energy-saving scheme,
I would strongly encourage you, from the
outset, to take legal advice which is specific
to the legal jurisdiction in which you operate.
For more information, contact Aaron Moore
at Cleaver Fulton Rankin, telephone 028
9024 3141, e-mail [email protected] or visit
the website at www.cfrlaw.co.uk.
PLEASE NOTE THAT THE CONTENT OF THIS ARTICLE IS FOR INFORMATION PURPOSES
.
ONLY AND FURTHER ADVICE SHOULD BE SOUGHT FROM A PROFESSIONAL ADVISOR
About the author
Aaron Moore is an
Associate in Cleaver
Fulton Rankin’s
Construction and
Dispute Resolution
teams. He specialises
in both contentious
and non-contentious
construction law
which sets him apart
from most other
lawyers in this jurisdiction. Aaron’s clients
include Sainsbury’s Supermarkets, River
Island and Antrim Borough Council. On
the non-contentious side, Aaron has been
involved in many high-profile projects, such
as the Titanic Signature Project.
NORTHERN BUILDER MAGAZINE | 1