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The NCF Blog

Category: Renewables

As a farmer you probably already know all too well the benefits of producing renewable energy on your farm. Not only can you power your own farming activities with the right setup, before 31 March 2019 you could produce a substantial surplus and sell it back to the grid to claw back the investment and make money.

However, the Government announced it wanted to end the generation part of the feed-in tariff in March 2019. And so they did, announcing that from 31 March 2019 you can no longer sell your renewable energy surplus back to the grid unless you are already registered for the FIT scheme. This means the only benefit now to renewable investment in most cases is being self-sufficient. Reason enough for most.

The biggest challenge in developing renewable energy infrastructure on a farm now then is investing in what works. You of course want to invest right away in the technologies that yield the best return and with sun, wind, farm by-products and energy crops to choose from, it ain’t a walk in the park choosing. Two technologies stand out – solar and anaerobic digestion – because they are suitable for most farms.


Farmers have been harnessing the power of the sun for decades. Small solar panel setups have been used to grow and feed crops and power the lighting in indoor pens since the 1960s. But the development of the technology means it is now more affordable and efficient than ever. You can have panels and modules stretching for acres that can transform a traditional farm into a solar farm.

When not mounted on the ground, solar panels are mounted on rooftops. Farms with masses of indoor space can mount solar panels on rooftops to maximise renewable energy production. Because you can place solar panels on buildings and land every farm can benefit from the technology no matter its size.

Anaerobic digestion

If you want to make better use of the massive waste your farm produces, anaerobic digestion (AD) controls the breakdown of organic materials in a digester. The result of which is a methane-rich biogas which can be burned to produce electricity or heat or to create biofertilizer. You can digest manure, slurry, maize, other energy crops, by-products of food production and biodegradable household waste.

Anaerobic digestion is considered environmentally-friendly because it accelerates the degradation of organic materials. Rather than leaving waste to decay in the open air you accelerate the process and contain the methane it creates. Methane contributes to global warming so any technology that catches it is good.

Financing the investment

Solar and AD can yield more than enough energy to power your farm activities with a surplus. Expect to pay £50,000 per quarter acre for solar and up to £20,000 for anaerobic digesters. To create a megawatt size solar farm you will need five acres approximately. The best finance for solar panels and other renewable energies is commercial finance. This will put a lump sum in your account.

There are numerous benefits to renewable energy for business. The returns always outweigh the investment with renewable technologies, which if set up correctly pay for themselves at a minimum. The world’s biggest companies are investing in renewable energy right now. Isn’t it time you got started too?

Whether you are a business owner looking to improve your company’s carbon footprint, or an entrepreneur with a smoking gun to change the renewable energy landscape, finance can help you achieve your goals.

If the only limitation you have is financial, then borrowing what you need with finance is the quickest way to raise capital for your project.

Here some other benefits to renewable energy finance

  1. Raise instant capital

Finance is not drip-fed. It is provided as a lump sum giving you the cash you need to start investing in new infrastructure right away. Your initial investment can proceed as soon as you are ready. Forget the need to seek outside investment. With renewable energy finance, you will have funds within 24-48 hours. Simple and quick.

  1. Hire Purchase equipment

Not interested in a standard loan? If you would rather setup a Hire Purchase agreement for your renewable energy products, such as solar panels or a windmill, that’s fine. With a Hire Purchase agreement, the lender buys the equipment and then loans it to you. You pay back the lender in monthly instalments until you pay off the equipment.

  1. Low repayments

You will pay back the amount you borrow plus interest. The interest part is important, because it determines how much you will pay to borrow the amount. Our interest rates start from just 3.6%. You can borrow from £10k to £500k, which is more than enough to invest in renewable energy for your business.

  1. Potential profits and ROI

Because of that low interest rate, many business that invest in renewable energy see a return on investment in months. For example, a factory that invests in 2Kw solar panels to power some of their machinery may find they produce more electricity than they need. This can be sold back to the grid at a much higher rate than interest.

  1. Improved business marketability

It is a fact that businesses and consumers are taking a greater interest in the environment. It makes business sense therefore to invest in renewable energy which has the potential to improve your company’s marketability. Generating your own electricity, or collecting your own water through an irrigation system, can be a big selling point to customers.

  1. Finance to suit your business

It is also important to consider the different types of finance available. In addition to a standard loan, you can refinance (which is where you release working capital by refinancing the equipment you have) or you can lease equipment. Discuss your options with one of our advisors to discover the best type of finance for you.

Interested in investing in renewable energy? Discuss finance solutions with our experts. Call us on 01234 240155 for a friendly chat.

Renewable energy, once seen as a flash in the pan, has now become mainstream as businesses come to understand the significant benefits that this can bring to their company.

Although feed-in tariffs have been tightened it still makes good business sense to utilise unused space to both power the operations of the business and provide a feed back to the grid to help offset rising energy bills.

Quite apart from this companies are coming to understand that environmentally aware consumers are rightfully asking questions about the businesses they deal with and often larger companies will require their suppliers to sign up to an environmental charter.

Minimising the cash flow impact

The cost of renewable schemes has dropped dramatically over the years with more companies providing greater competition and new technologies making the whole thing much more affordable.

It would be wrong to say however that it is not a significant investment for a company to make with renewables and this can make it difficult to afford or indeed stop the project in its tracks.

But if you have renewable goals then financing your development may well be a way forward, providing cash to pay for the project but making sure that working capital and free cash don’t suffer as a result.

It’s important to understand the nature of renewable energy. A typical large turbine will have a life expectancy of 25-30 years, so this is most certainly not a short-term project and accordingly it is a smart move to match the type of finance to the type of expense incurred.

Although it is obvious to say, it is important to remember that the shorter the term that your renewable finance is taken over the higher the repayments will be. For a highly profitable, cash rich company this will be no issue, but if your company is wanting to reduce its carbon footprint and energy costs but doesn’t have a lot of cash then taking a longer repayment term is a sensible move.

What to look for with renewable energy finance

As we have seen, matching the term of the loan to the length of a project is important and so it is equally as important to look for a lender who understands renewable finance.

There are several products that may prove useful and a good lender will be able to speak with you about the pros and cons of each and find a lending product that will align with your goals.

Having that individual approach, whilst understanding businesses and their needs is an important aspect that borrowers should have in the forefront of their mind when looking for finance.

Borrowers should look for sensible repayment terms; after all, this loan will be around for a long time and it is vital that companies are realistic about the affordability aspect.

It is also useful to be clear about the overpayment and payment holiday options that may be available so that any changing economic conditions can be dealt with along the way.

Organising renewable energy finance is a key step in ensuring that your project will be viable, providing free energy for your business and ensuring that you meet your environmental goals for years to come.

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