Dudley Peverill

The Benefits of Renewable Energy Diversification

The current compound annual growth rate (CAGR) of the UK renewable energy market is currently 9% and growing. This, amongst other things shows increasing progress towards the UK government’s “Net Zero Strategy: Build Back Greener”.  The recently published document (October 2021) established a target of meeting greenhouse gas (GHG) net zero by the year 2050. The NFU has established a net zero goal of its own, aiming for the UK farming sector to achieve this by 2040. You can read the NFU publication here. The NFU aim to achieve this through the following:

  • Improving farming’s productive efficiency
  • Improving land management and changing land use to capture more carbon
  • Boosting renewable energy and the wider bioeconomy

The agricultural transition plan and its respective funding channels display how farms can generate income whilst linking with the NFU and UK government environmental and net zero targets.

However, how do renewable energy developments stack up as farm diversification opportunities? Read on to gain an insight into some of the incentives. 

Feel free to contact us today and we’ll gladly offer our advice and assistance towards helping you discover your next renewable energy project.

What are the various renewable options?

There are many types of renewable energy opportunities available to landowners and farmers. Investing in a renewables farm diversification can generate long-term income that is both passive and guaranteed. The most common schemes and opportunities currently involve:

  • Solar panels and farms
  • Wind turbines and farms
  • Battery storage
  • Electric Vehicle (EV) charging
  • Anaerobic digester (AD) plants

Some of these opportunities (particularly solar) are more common than others. Solar for example, can be installed on the rooftops of farm buildings, making use of otherwise unproductive spaces. Solar and wind farms can also still be grazed (subject to agreements), allowing farms to retain the land for agricultural production. 

Battery storage can be used in conjunction with renewable energy technologies such as solar, enabling the release of energy during times of peak demand, thus reducing costs when tariffs are high.

Electric vehicle market growth is predicted to double in the year of 2022. According to SMMT, plug-in vehicles account for more than one out of every six new registrations, while battery electric cars alone account for one out of every nine, with more new registrations than the years 2016 to 2020 combined. The interest in EV charging developments has increased significantly, with many developers also looking towards urban fringe developments.

What are the main benefits of renewables to farmers and landowners?

Passive and guaranteed income

Perhaps one of the most prevalent methods for the installation of renewable energy technology is the lease of land to renewables development companies. This ensures guaranteed income over a fixed period. However, there are other options available, such as a farmer or landowner funding the project in its entirety, or collaborating with others to deliver a renewables enterprise with perhaps higher return on investment. 

Reduced energy overheads

Due to a particularly cold European winter in 2020/21, a windless summer and increasing demand from Asia, we are seeing sharp increases in energy prices. Farming enterprises and their respective infrastructure can be very demanding with regards to energy consumption, particularly dairies, poultry housing, grain storage and drying to name a few. Investing in renewable technologies can help reduce energy costs, by utilising the renewable energy produced onsite. Not only does this reduce cost and reliance on grid power sources, but also reduces the net emissions generated by the farming business.

Tax efficiency

Some may be put off by the thought of losing Agricultural Property Relief and incurring more inheritance tax. However, Business Property Relief may be accessible if an agreement is properly structured and both parties are considered to share the risk by way of collaboration. It is advisable to consult your relevant legal and financial professionals when structuring these agreements from an inheritance tax point of view.

Environmental and ethical sustainability

Aside from financial benefits, choosing a renewable energy based farm diversification allows you to help deliver the NFU’s greenhouse gas emission target of net zero by 2040. Diversifying energy supplies also reduces the UK’s dependency on imported fuels.


The opportunity for renewable energy farm diversification is growing. Some may be more suitable to you and your farm than others, due to mainly geographical conditions.

Farm diversification through renewable developments can increase financial resilience within your farming business, whilst decreasing harmful greenhouse gas emissions. 

Feel free to Contact us  today for a free, no obligations initial consultation regarding renewables, or other farm diversification opportunities.

Unsure of what farm diversification enterprise is for you? Use our free diversification discovery assistant. Simply fill out the short questionnaire and receive a brief,  free review of what farm diversifications may suit you and your family business.