Stuart Gourley explores how financial models are beginning to reflect the value that renewable assets can bring landowners.
August 28, 2026
In this contributed blog, Stuart Gourley, founder director and chief of product at renewable land leasing specialist RELA explores the growth in financial models that can unlock the value of renewable assets for landowners.
Across the UK, utility-scale solar, wind and battery energy storage projects are becoming an increasingly important part of the rural economy. For the landowners who host them, theycreate something less frequently discussed: a valuable, income-producing asset.
That matters at a time when farming businesses are under pressure from rising costs, changing markets, succession planning, taxation, and the need to invest for the future. Capital may be needed to acquire neighbouring land, invest in machinery or infrastructure, reduce debt, diversify into other assets or provide for the next generation.
For some landowners, hosting utility-scale renewable energy has already become part of that diversification.
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The question increasingly being asked is what else can be done with the value these projects create, while retaining ownership of the land itself.
Much of the discussion around renewable energy and agricultural land understandably focuses on the development stage: whether a project should proceed, how much land it will require and how farming and energy production can coexist.
Those are important questions.
But once a utility-scale project is operating, or approaching operation, the landowner’s position changes. A long-term lease with an established renewable energy operator can create an income stream extending for several decades.
That income can provide considerable financial stability. It can also create a valuable asset in its own right.
The difficulty is timing.
Traditional renewable energy leases generally pay rent periodically over the life of the project. A landowner may therefore have a significant future income stream but limited ability to access its capital value today.
That can matter when farming businesses face decisions that cannot wait 20 or 30 years.
There is no single answer for a landowner considering how best to use their renewable energy income.
For many, retaining the lease exactly as it is and receiving regular rental payments will remain the right choice. It provides predictable income if the landowner is confident that the project will continue to operate for the long-term, and requires no further financial decision.
Where significant capital is required, borrowing against the asset may be an option. However, conventional lending will generally involve interest, repayments that must be made irrespective of whether the project continues to operate, personal guarantees and security over the underlying land.
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Selling land can also release capital, but comes with the obvious consequence that the landowner gives up ownership and potentially an asset that has been held by the family for generations. That means giving up more than the current value of the property. The landowner also forgoes future capital growth in the land and, importantly for farming families, the ability for that land to remain in family ownership after the renewable energy project is renewed, repowered or eventually decommissioned. Depending on the project, retaining ownership may also allow agricultural activity to continue alongside energy generation.
There has been a recent shift in thinking around these questions. Historically, accessing a large amount of capital from land has often meant either borrowing against it or selling it. For renewable energy landowners, that need not necessarily be the case.
Increasingly, there is another option: capitalising some or all of the future income from the renewable energy lease itself.
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It is an approach that reflects the growing maturity of the utility-scale renewable energy market. As projects become established long-term infrastructure assets, the leases sitting beneath them also have an identifiable financial value.
New structures entering the UK market allow qualifying renewable energy landowners to exchange an agreed proportion of future fixed lease payments for an upfront lump sum.
Importantly, this does not require the underlying land to be sold. Ownership remains with the landowner, together with the long-term value and optionality that ownership provides.
RELA, an Australian-founded specialist that entered the UK market in 2026, is just one business introducing this model. Its focus is on utility-scale renewable energy projects, typically 25MW and above, including solar, wind and battery energy storage.
Under such a structure, the landowner retains ownership of the land, their existing lease with the renewable energy operator, their rights under that lease and any revenue-linked payments. A concurrent lease is created through which RELA provides an upfront payment in exchange for an agreed proportion of the future fixed rental income.
There is flexibility in how much is capitalised and for how long. A landowner might choose to capitalise only part of the lease, retaining some annual rental income, rather than treating the decision as an all-or-nothing choice.
That distinction is important. The purpose is not simply to replace rental income with a lump sum. It is to give the landowner another way to structure an asset they already own around their particular circumstances, without having to relinquish the land that sits beneath it.
The answer will be different for every landowner.
For one farming family, accessing capital may provide the opportunity to acquire additional land or invest in the existing farming operation. For another it may enable diversification away from a single property asset. Others may be considering succession, gifts to the next generation or wider estate planning.
In each case, retaining the underlying land can be significant. The family continues to own the asset and participate in any long-term capital growth, while preserving the ability to farm the land where the project allows and ultimately pass it to the next generation. When the renewable energy project reaches the end of its life, the land remains theirs.
Changes to Agricultural Property Relief and Business Property Relief have brought those questions into sharper focus for many UK farming families. From April 2026, changes to inheritance tax relief mean that some agricultural estates face potential liabilities that previously may not have arisen.
Renewable energy leases can further increase the value attached to agricultural property while the underlying asset remains relatively illiquid. A lease capitalisation transaction converts that into a liquid asset (cash) that can be gifted early and reduces the value of the land for IHT purposes.
Capitalising lease income will not provide the right answer in every circumstance and tax treatment needs careful professional advice. But having another source of capital available gives landowners more choices when considering those decisions.
The significance of this extends beyond individual farms.
RELA estimates that more than 3,000 UK landowners could potentially hold leases associated with utility-scale solar, wind and battery projects of sufficient scale to consider capitalisation. It estimates the current UK renewable energy lease market at approximately £4 billion.
As the UK continues to expand utility-scale renewable energy, that market will grow.
The renewable energy transition is therefore doing more than changing how electricity is generated. It is creating long-duration assets across rural Britain and new sources of wealth for some of the landowners hosting the infrastructure.
The financial market is beginning to evolve around those assets.
For landowners, the important point is not that one approach is inherently better than another. Some will value decades of regular rental income. Others will have a better use for some of that capital today.
What has been missing until now is the ability to make that choice without necessarily selling the land or borrowing against it.
As Britain’s utility-scale renewable energy sector matures, giving landowners greater flexibility over the value created on their land should be part of that evolution.
Read more about:
Stuart Gourley
Founder director & chief of product, RELA
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