Renewable energies – Nils Eggers on the risks of insolvency law

Ribnitz-Damgarten, July 14, 2022: BRRS partner Nils Eggers informs about the importance of forward-looking contract drafting on the occasion of his advice to an internationally active company:

Renewable energies are becoming increasingly important in Germany – climate change, energy crisis, supply shortages. One of the most important energy sources in this country is solar energy. Photovoltaic systems are often installed as ground-mounted or rooftop systems on land owned by third parties.

PV systems in third-party ownership

If the photovoltaic system is not transferred to the landowner, long-term usage transfer agreements are concluded for a fee. This constellation can lead to risks for the system operator in the event of the landowner’s insolvency, which should be countered by drafting contracts with foresight.

Energy supplier, rental and lease agreements continue to exist in the event of insolvency

In the insolvency of the land transferor, rental and lease agreements entered into by the landlord or lessor continue to exist with effect for the insolvency estate. In contrast to tenant insolvency, the insolvency administrator has no special right of termination in this context. The operator of the photovoltaic system can therefore continue the contractual relationship with the insolvency administrator.

But what about the usage fee already paid before the insolvency?

Usage contracts for ground-mounted photovoltaic systems regularly have a term of several decades. It is not uncommon for the usage fee for the entire term of the contract to be paid as a one-off payment at the start of the contract. In insolvency, the interests of the community of creditors in maintaining and increasing the insolvency estate collide with the interests of the plant operator in the validity of his advance payment.

The Insolvency Code has resolved this conflict with the principle of consideration. Since the insolvency administrator must grant continued use, the insolvency estate can claim a corresponding usage fee. The one-off amount is therefore converted periodically for the transfer of use from the opening of insolvency proceedings and the pro rata usage fee must be paid (again) to the insolvency administrator. The advance payment made before the insolvency is ineffective for the period after the opening of insolvency proceedings. In this respect, the user is referred to an application to the insolvency table.

This solution is easy to handle in the situation of insolvency administration – however, the payer bears the risk of double payment. BRRS partner Nils Eggers therefore recommends: In uncertain times such as these, it may be advisable to waive the oneoff payment and pay the usage fee periodically and to take this into account when drafting the contract at the start of the tenancy or lease.”

DE