On-farm renewable energy systems can bring major cost savings but farmers aiming to obtain the full, long-term benefits from generating their own electricity need to do their homework first.

Whether you are considering an offer from an energy company that wants to site its equipment on your land, or you are looking at a scheme of your own – be it biomass, anaerobic digestion, solar or wind power – it pays to look ahead.

Energy companies generally negotiate on timescales of around 25 years when looking for land to erect wind turbines or solar equipment. Similarly, you need to think about your own future energy requirements, not just over the next few years, but the next couple of decades, if you want to install your own energy generating system.

Victoria Lancaster, Renewable Energy Advisor for H&H Land and Property, said: “What is suitable for your farm’s requirements now may be very different in 20 years’ time.

“To work out your current and future needs, it’s vital to carry out a 360 degree on-farm energy audit, so you can make the best choices for the future. Although using land to generate your own electricity or receiving fixed payments from power companies for the use of your land may make good business sense now, they may be a less attractive option five, 10 or 20 years down the line, unless you plan them very carefully.”

H&H Land and Property works with farmers on both sides of the Border to help them reach properly-researched decisions on whether renewable energy is the right choice for them. An on-farm audit looks at how much energy a business is currently purchasing and, using the farm business plan, predict how that is likely to change in the next 20 years. Issues will include a review of what the power is used for – ie is electricity or hot water most important to the business?

There are a number of options for on-farm energy generation and also a number of Government incentives available to encourage the production of more renewable power. But the devil is in the detail; for example some incentives offered in England may not be available in Scotland.

Victoria said: “Different forms of energy generation are more suitable for different types of farming enterprise. But you need to think long-term if you are to get the most out of them.’

For example, if you decide to go down the biomass route, you might prefer to make savings by growing your own wood to fuel the system.

“But remember, it’s not just the capital cost of installing the equipment that you need to factor in – how much extra will it cost you to hire a chipper, store and dry the woodchip? Do you have the time and equipment to do this? Is the financial saving worth the extra effort? Similarly, a log boiler might make sense now but requires daily attention and is physically demanding to run so might not be a long term option for some.

Anaerobic digestion (AD), creates gas and heat from farm waste and other feedstock which is then converted into electricity and hot water. This is an increasingly popular on-farm option. But bear in mind that maintaining the system costs daily time and effort, and the land required to produce the feedstock may actually turn out to be more profitable if it is put to other uses.

The UK Government is currently offering grants and loans to install AD equipment through the WRAP on-farm AD fund. However, this is only available in England, so Scottish farmers can’t take advantage of this help.

The Feed in Tariff (FIT) is available on both sides of the Border and gives a return on the extra energy that you generate and export to the National Grid. This can help to pay back to the capital costs of installing the energy generating equipment.

If your business uses more heat/hot water than electricity, it is worth looking at the new Commercial Renewable Heat Incentive (CRHI). This is likely to be helpful for enterprises such as farm businesses with holiday cottages, swimming pools, pig breeders and food producers using hot water, such as cheese makers.

Victoria said: “The CRHI is a useful scheme but don’t get caught out. There has been an explosion in new businesses offering to install biomass boilers.

“Before making any decisions, it is VITAL to get recommendations and at least three different quotes. Research your provider before signing up - many people are now experiencing problems with their systems, due to poor quality installations, over-sizing, poor cladding on pipework or expensive hidden costs. You may also need planning consent before going ahead with an installation.”

The timing of peak demand for your business will have an impact on the best system for your needs. Broiler units, for example, which use lots of power during the day, may find a 50kW on-roof solar PV installation provides both electricity and a regular income from energy exported to the National Grid. This kind of system costs around £50,000 and pays for itself in around six years.

However, if your main aim is to obtain an income from energy generation, a ‘mid’ wind turbine, up to 500kW, or a one-acre solar tracker, which must connect into a meter point on the farm and can give 30% more output than a static system, may be better choices. Farms with a high drop, strongly flowing waterfall or deep, fast flowing river on site, should also explore hydro-energy options.

In some cases, if you use a lot of energy, you may be best to start by simply switching your supplier, negotiating a different deal or joining a community buying scheme.

Victoria said: “These are the kind of issues we look at in depth when we carry out an on-farm audit. If you are in any doubt about your options, it’s always best to take professional advice.”