The potential value of renewables installations 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.

The choices available to landowners

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.

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.

There may be another option: capitalising some or all of the future income from the renewable energy lease itself. 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.

Turning future income into capital today

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, without the requirement to sell the underlying land.

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, its existing lease with the renewable energy operator, its 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.

What can that flexibility achieve?

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.

Changes to agricultural property relief and business property relief tax rules have brought those questions into sharper focus for many UK farming families. From April 2026, changes to inheritance tax (IHT) 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 choice when considering those decisions.

A maturing renewable energy market

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 £4bn.

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 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.

The views and opinions expressed in this article are those of the author and do not necessarily reflect those of the Energy Institute.

• Further reading: ‘Why energy volatility is reshaping property investment’. Energy price shocks are becoming a recurring feature of the global economy. Jeff Blaylock, Head of Client at Deepki UK, a real estate sustainability tech company, argues that for real estate investors, resilience increasingly depends on understanding and improving the energy performance of their assets.
• ‘Clean energy projects face fewer hurdles under England’s new planning framework’. The UK government’s updated National Planning Policy Framework for England should make it easier for clean energy and grid projects to win approval, even when they are outside areas identified locally for development.