Leasing land to EV Charging Operators (EVCOs) is a potentially lucrative opportunity for landowners. These leases have the potential to generate additional rental income on their own account but may also attract EV users to the wider site and spend money on goods and services there.
With EVs currently being the fastest growing powertrain, and EV charging infrastructure lagging behind, now could be a perfect opportunity for landowners.
But it’s not necessarily all sunshine, clean air and roses. In this article, Ed Cracknell and Sophie Ridley outline some of the important considerations to bear in mind before entering into a lease with an EVCO.
Security of tenure
On 2 December 2024, the government published a summary of responses to its consultation on land rights and consents for electricity network infrastructure.
One of the topics under consideration is whether electrical infrastructure should benefit from a set of rules similar to the Electronic Communications Code (ECC) which was introduced for operators of telecoms equipment and networks in 2017.
If such a code is introduced, it could make EVCOs difficult to remove if the landowner needs the land back. As matters currently stand, the lease can be excluded from the protection of the Landlord and Tenant Act 1954.
Bear in mind also that EVCOs are likely to need quite long terms, perhaps 25 years or more, in order to get a return on their investment.
Power connection
Green infrastructure is a rapidly expanding market and so it is unsurprising that there are lots of different charging point models which all have different power demands.
Where an EVCO is looking to connect to the landowner’s power supply it is important that the lease enables the landowner to recover its electricity costs from the EVCO. Where an EVCO requires connection to an independent power supply, landowners will need to consider the implications of granting a substation lease to a distribution network operator.
Third party consents
Ultra-rapid and super-rapid charging points will typically require high voltage cables.
Third party consents such as planning permission will be needed at the outset and further consents may be required if the EVCO upgrades the charging points as the technology continues to develop. Where cabling passes over land outside the EVCO’s or even the landowner’s demise, consideration needs to be given to wayleave agreements and cabling easements.
Lift and shift provisions
The installation of EV charging points requires a significant upfront cost for an EVCO and so, as mentioned above, they will generally want to secure a lease with a lengthy term and/or with security of tenure.
A longer lease term is often unattractive for landowners who want to keep the door open to development opportunities. It is therefore important to include well considered lift and shift provisions that will enable the landlord to move electric charging points if necessary. The landlord will need to bear in mind costs of relocation, the need for additional consents and any practical restrictions on moving cabling and re-connecting to power sources which will often be site-specific.
If it does not make practical or financial sense to relocate an EV charging point then the landowner may want to consider including a break option or negotiating a shorter term with the EVCO instead. Although the EVCO will likely push for a break premium or a lower rent, this may end up being more cost effective than exercising lift and shift provisions.
Conclusion
EVs are becoming more and more common, and drivers need the means to charge them. Increasingly, drivers are likely to choose destinations based on whether or not they have EV chargers. Landowners that are not offering charging facilities will be left behind. But leasing land for charging vehicles presents a range of issues. Whilst they could produce a valuable income stream, if the government introduces an ECC-style regime for electrical infrastructure, landowners may see rents fall and their rights eroded.
Ed Cracknell is a partner in the property litigation team. He has particular interest in the renewal and termination of telecoms leases under the Electronic Communications Code. Sophie Ridley is a trainee in the same team.
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