Feed-in tariffs offer a valuable income

TENS of thousands of pounds additional annual income is there for the taking by rural estates and farms.

That is, if they take advantage of the new renewable energy feed-in tariff scheme says Knight Frank.

The company’s renewable energy team has undertaken an analysis contained in its latest publication, The Rural Report.

The firm created a hypothetical “renewable energy” estate that utilises all the main forms of renewable energy - solar, wind, hydro and anaerobic digestion. It then calculated how much income could be derived from each using feed-in tariffs.

Assuming all the electricity produced was exported to the National Grid, two wind turbines created an annual income of £300,000, an anaerobic digester created an extra £460,000 per year while a modest hydroelectric scheme added £190,000.

“Feed-in tariffs were introduced in the dying days of the Labour government and were designed to encourage people to create their own renewable electricity.

An index-linked payment guaranteed for up to 25 years is made for each unit of electricity produced even if it used by the generator for their own consumption. The tariff varies depending on how the energy is being generated and the scale of the scheme,” says the report.

The smaller the scheme and the longer its potential payback, the larger the payment.

Head of Knight Frank’s renewables and energy department, Christopher Smith, said: “We have already seen a huge surge in enquiries from landowners looking to take advantage of feed-in tariffs.

“One of the attractive things about them is payments are guaranteed for up to 25 years, which means it is now easier to get bank funding to set up renewable energy projects.
The contribution from photovoltaic solar panels was a more modest £26,300 but the total income came to £916,000 per annum with a lifetime potential of £18.5m.

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