More than a third of farmers are expecting to invest in renewable energy with many installing green power this year, according to a new survey.
The research was released by Barclays Bank, which has launched a £100 million fund to match the demand from farmers seeking to cut energy bills and generate new income.
The figures released by the bank reveal that 37 per cent of the UK’s 200,000 farmers are expecting to invest in renewable energy and are further expecting the investment to generate returns averaging £25,000 per year.
Developed with sector specialists including National Farmers Union (NFU), the fund is available for solar, wind, and hydro projects in the UK, with Barclays including projected feed-in-tariffs (FIT) when assessing each loan.
"For farmers investing makes sense - it's good for the environment, but for the majority it's about good business,” said Travers Clarke-Walker, Product and Marketing Director for Barclays Business.
“Over the years farmers have struggled with low commodity prices and increasing costs, and Barclays has already supported many farmers as they seek new ways of making money.
“Renewable energy production offers farmers a further opportunity to develop their businesses and add to their traditionally vital roles of producing food and managing the countryside.
"What farmers see is a win-win – lower costs and increased income, and the majority expect the investment to pay for itself in under 10 years. Meaning they are looking forward to many further years of lower energy costs and a potentially new income as they sell energy back to the grid.
"When looking at a new renewable project, reliable technology, competent maintenance and management are all important considerations, though of course farmers should also keep an eye on the current feed in tariff rates offered to ensure it works for their business."
Four out of five (80 per cent) of the farmers questioned recognise that renewable energy can provide significant cost savings, with 60 per cent expecting it to generate additional income for their business. In the medium term, increased investment in renewable energy appears even more likely, with Barclays predicting the costs of wind and solar projects to fall by up to 50 per cent in the next three to five years.
The new fund will support the government’s recent commitment for the UK to generate 15 per cent of its energy from renewable sources by 2020. In establishing the fund Barclays has worked closely with a number of organisations to develop this new fund, including the NFU, Country, Land & Business Association; Royal Institution of Chartered Surveyors. The organisations will continue to be involved with the fund in an advisory capacity, and their views will be fed in to consideration for loan applications.
"The opportunities for farmers to produce renewable energy thereby helping to decarbonise the economy and contribute to the UK’s long-term energy security are there for all to see,” said Meurig Raymond, NFU deputy president. “Given the significant up-front costs of renewables technologies, commercial lending is essential to unlocking these opportunities, so it’s great to see Barclays committing to make additional funding to the sector".
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