Farmers can get better wind deal

FARMERS CONSIDERING hosting wind turbines on their land are being urged to seek the advice of a commercial lawyer to get a better deal before signing any papers.

“Take proper professional advice and be very sceptical of the pitfalls,” said David Hooper of property and business consultants Brown & Co.

“Farmers should only sign up if they are completely sure about the level of income and the level of risk they are taking on,” he added.

Mr Hooper feels that farmers are receiving insufficient reward for the level of risk they are being asked to take on.

“There is a lot of hype masking the uncertainty that is being deliberately played down,” said Mr Hooper.

Currently the farmer may receive between £3000 and £7000 per turbine in rent and a further 2-5% of the value of electricity generated.

But the farmer should be prepared to haggle with the wind company to secure a share of the income stream from both the electricity produced and the subsidy paid by the government.

Mr Hooper points to a typical 12MW wind farm of six 2MW wind turbines, for which, by their own expectations, developers would expect to earn about £2.5m a year.

Of this, about £750,000 comes from the sale of the electricity itself.

The other £1.75m, about 70% of the total income, comes from the subsidy given by the government through the Climate Change Levy and the Renewables Obligation Certificates which is the indirect subsidy given to wind power industry through higher prices to consumers.

In this example, if the farmer were to receive 5% of the total gross income, the farmer‘s share would rise to £130,000 a year plus a further income from the site rent.

While the figures look attractive, Mr Hooper warned that farmers should be prepared for a lot of hard bargaining to secure a reasonable cut of the profits.