Solar panels have dominated the renewable energy sector for many agricultural clients, often utilising unused roof space to provide clean and lower cost energy. This has been of particular importance in recent years with the large rise in energy costs, especially when farm buildings can be energy intensive. Energy storage can be expensive or not possible, meaning the peak energy generation often doesn’t align with the demands of the farm, such as for running cold stores over winter and spring. Wind turbines could be the solution.
The effective ban on onshore wind turbines was lifted by the new Labour government, having been in place since 2015. Wind turbines could allow for additional electricity generation throughout the darker winter months and help off-set the ongoing running costs of the farm. As with solar panels, there is a sizeable up-front capital cost, as well as ongoing maintenance to consider. The investment qualifies as plant and machinery for capital allowance purposes, so is eligible for Annual Investment Allowance, or Full Expensing if purchased by a company.
Wind turbines could now be a feasible accompaniment to solar panels, helping farmers move closer to being net-zero and providing year-round energy savings. Ample supply of land will likely make free-standing turbines the preferred option (the alternative being roof-mounted). These are more expensive but are typically more productive, assuming placement in an area with sufficient wind exposure. Costs for a 100kW turbine would likely exceed £500,000.
Return on investment is variable as it is dependent on the quality of the turbine, average wind speeds and percentage of electricity used for own consumption. Where the farm doesn’t use all the generated electricity, a grid connection becomes paramount, which can be costly and time-consuming to set up. The payback period could vary between 6 and 15 years, which is why a full feasibility study is required, and this compares against a typical 7 to 10 years for solar panels. Planning permission and ongoing maintenance costs should also be factored in, whilst planning permission could still be difficult to obtain despite the relaxation of the rules.
There is not an outright winner between wind turbines and solar panels. Wind turbines are once again a viable option with the relaxing of rules by the new Labour government, with many farms and businesses now looking at a combined approach for year-round production.
*The views expressed are the author’s and not ICAEW’s