Industry sources say that interest in on-farm renewable is growing in the UK as farmers seek other sources of income to offset high costs, low returns and the effects of disastrous weather.

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On Tuesday, NFU said its Farm Energy Service had reported "record levels of interest" in renewable energy from farmers in the year since its launch. 2012 saw crop yields reduced and productivity down to 1980s levels, which precipitated many farmers to look into diversifying their businesses.

NFU estimates that up to 20 percent of its members are generating renewable energy in one form or another. Enquiries to its Farm Energy Service, which received over 1,500 referrals  during its first 12 months, show farmers are making the best use of the variety of renewable energy sources available to them.

52 per cent of renewable queries relate to solar technologies, which tend to have more eligible sites than any other technologies. 30 per cent of renewable queries relate to wind turbines which, according to specialist surveyors Fisher German, offer farmers a particularly strong rate of return. Yields can reach 25 per cent in areas of high wind. Analysis from NatWest, RBS and RenewableUK shows farmers earn between £12,000 and £50,000p/a on average from generating their own wind energy from installations of between 20 and 80kW .

Maria McCaffery, Chief Executive of RenewableUK, said, "Farmers are experts at harnessing the Earth's natural resources, so it’s no surprise that they are leading the way on wind energy. The UK has the most powerful wind resource in Europe and this has provided a vital source of income for farmers, helping to preserve rural communities in Britain."

The picture painted of the renewables sector is not all positive; the past year has also revealed two barriers to the uptake of renewable energy – financing and planning. Furthermore, government subsidies are subject to change as uptake increases. However, although these can be difficult to overcome NFU said the two potential stumbling blocks of financing and planning "have not been as difficult as was feared when the Service launched." 

According to Fisher German, the approval rate for wind projects is very strong. 82 per cent of applications for smaller wind turbines (between 5 and 50kW) are approved at local level (Planning Committee or under Officers delegated powers). Of the 18 per cent that do go to appeal, a further two thirds are also granted consent. Medium sized turbines can take 18-24 months to get through planning but, even here, the success rate remains high with 85 per cent of the applications being granted planning permission.

Liberty Stones from Fisher German commented, "National Planning Policy currently recognises that small scale renewable projects make a valuable contribution to cutting emissions and promotes the approval of such projects subject to their impacts being acceptable. Provided farmers receive the right support, planning is not the concern that many anticipate."

Scientific tools can also help make financing less of a concern. In July 2012, NatWest and RBS teamed up with the Met Office to provide farm prospects with tailored wind speed data, allowing farmers to assess the profitability of a wind turbine project early on and in great detail.  

According to lending figures from NatWest and RBS, the bulk of farmers interested in renewable energy are in the Midlands, which accounts for 40 per cent of renewable lending to farmers, followed by Scotland and the North East (both at 20 percent) and the South West (16 percent).

Fisher German estimates that average rates of return for technologies are as follows:

o          Wind up to 25 per cent

o          AD 12-24 per cent

o          Hydro 10-15 per cent

o          Solar 8-15 per cent

o          Biomass 8-15 per cent