With almost one quarter of farmers involved with renewable energy in one form or another, the income from these projects has become a key factor in their future prosperity, according to a leading banker.
Donald MacRae said the importance of the renewable energy sector to farming had emerged from a survey carried out by the Bank of Scotland where almost half of the respondents had listed renewable projects as the second most important non-farming income.
“The findings are good news for farmers investing in production of renewable energy. While planning remains an obstacle, few found difficulties financing their projects allowing them to grow their businesses in difficult economic conditions.
“Farmers are optimistic about their future prospects, but recognise the need for diversification. Renewable energy is playing an increasingly significant role, partly because income is generally consistent with expectations.
“Last year’s poor weather ensured the recession finally caught up with the industry, which had been relatively unscathed. There is no doubt that challenges lie ahead. However, long term prospects are healthy and renewable energy will undoubtedly become increasingly important in the future prosperity of Scotland’s oldest industry.”
The survey revealed that wind power, wood fuel heating and solar power were the most popular options with 16 per cent of respondents saying they were now involved in wind projects and 10 per cent had invested in solar power and wood fuel heating.
Projecting forward, another 16 per cent of farmers plan to progress with wind power in the next 12 months, with 10 per cent going to wood fuel heating and solar power projects and another 4 per cent plan to invest in hydro power.
The survey showed that the biggest obstacle to investment in renewable projects continued to be obtaining planning permission, particularly for wind and hydro power plants.
Of those farmers who said they had set up or planned to set up a wind energy project, 76 per cent stated it had been very difficult or difficult to obtain planning permission. For hydro schemes, 60 per cent described obtaining planning consent as either difficult or very difficult.
Despite the planning problems, financing these schemes was seen as easy by most farmers, with 76 per cent of those setting up a solar project finding it not difficult to finance their investment.
Similarly, 68 per cent of those investing in wood fuel heating and 53 per cent of farmers planning wind power projects found it easy to obtain finance.
On the income side, this had generally been in line or had exceeded expectations. Broken down into different projects all of the wood fuel heating projects had met expectations while 80 per cent of wind power and 78 per cent of solar power projects were categorized as either having met or exceeded expectations.