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Global Bioenergy Industry News

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Monday, September 05, 2011
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Farmers Flock to Invest in Renewable Schemes

UK - An increasing number of farmers are embracing renewable energy schemes with a potential return on investment of more than 10 per cent. With income for farmers dropping as commodity prices have plummeted, the farming community has been forced to look for new ways to make money.

There has been a massive surge in interest among the UK’s farmers since the Government introduced new subsidies – known as Feed in Tariffs (FITs) – in April last year.

Even changes brought in earlier this year have made little impact on farmers as most of the schemes under consideration are small and medium sized and well below the 50kW mark identified by the Government for proposed cuts in tariffs available.

With returns of 10 per cent or more on investment, installing some form of renewable energy generation – most commonly solar panels or wind turbines – is seen as a secure investment by the farming community. Across the UK, more than a third of farmers are believed to be considering investing in renewable energy schemes.

Eco Environments, one of the UK’s leading renewable energy providers, says interest from farmers has “gone through the roof” in the past six months.

David Hunt, a director with Eco Environments, said: “The interest from the farming community in the past six months has been phenomenal. We are currently speaking to dozens of farmers in England and Wales who have either given the go ahead to a renewable energy project or are seriously considering one. Renewable energy for farms is one of the fastest growing areas of our business.”

Meanwhile, Jonathan Scurlock, the NFU’s chief adviser on renewable energy, commented: “Farmers are extremely interested in diversifying and this is completely compatible with the traditional business of a farm.”

The Feed in Tariffs system has quite simply transformed the renewable energy industry in the UK. Customers are paid for every kilowatt hour of electricity their system produces irrespective of whether they use it or not as well as being paid for electricity sold back to the Grid.

David Hunt, whose company has a network of offices across the UK, added: “There is considerable interest among farmers in the potential benefits of harnessing renewable energy on their farms. It provides them with a strong and ongoing income at a time when commodity prices are falling; it allows them to make the best use of their land; it fits with the farming culture of business diversification; and, it allows them to generate their own electricity and become increasingly self-sustainable.

“We are currently working with farmers across the UK with schemes either completed or in the planning stages in Cumbria, the North East, Lancashire, Merseyside and North Wales.”

The Feed in Tariff scheme offers guaranteed cash back for the next 25 years on every unit of electricity generated by a solar panel or 20 years for a wind turbine.

The system is designed to offer a return of over 10 per cent on all scales of project, making it more attractive for investors than a bank account and more reliable than the stock market.

The average barn roof could generate as much as £5,000 of income a year if electricity-generating solar panels are installed. Larger field-based projects of 50kwp have the potential to generate income/savings of more than £15,000 a year.

Drive around Europe, particularly Germany, Spain and Italy, and you will readily see how farmers on the Continent have been actively installing renewable energy schemes to help bring them new income streams.

David Hunt added: “Most people, including farmers, do not like taking risks. A guaranteed annual return on investment of over 10 per cent is very attractive at any time, but even more so at a time when the wider economy remains in such a state of flux. On many schemes, the return on investment is considerably greater.”

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