FARMERS HAVE been urged to view wind turbines as ‘crops’– and consider selling them.

With returns on investment in renewable energy at 'a hiatus', Calum Innes, a partner at property consultancy Galbraith, has suggested that selling a wind turbine could potentially create substantial gains for use in positive, longer-term investments such as agricultural or forestry land, or perhaps diversifying into other property sectors.

Mr Innes reported strong demand for good developments – Galbraith recently sold Ferneylea Windfarm, comprising two 750kW turbines, for a 'market leading' price. Duncan White of Renewable Power Exchange, the seller, confirmed that the interest generated in the subjects from a targeted marketed campaign had been 'unprecedented' and the price achieved was significantly ahead of any sum offered off-market.

Mr Innes said that the time was right for many farmers to be considering their options in respect of their wind turbine developments. The feed-in tariff underpins a generous return on capital and most operators with a turbine operating under a FiT will have achieved good returns in the low-interest rate climate prevailing. However, this environment may change following this month’s increase in the base rate from 0.25 to 0.5%.

At the same time, the FiT has been severely restricted for new schemes, fuelling interest from investors seeking to aggregate existing assets.

“Many farmers and land owners view wind turbines as an investment in property rather than a crop or item of plant," noted Mr Innes. "However, it is a depreciating asset and it is important to examine that investment and balance the long-term benefits of selling and holding."

The preferred option would be to sell the turbine and its underlying income stream whilst retaining the land subject to a lease, rather than waiting for the turbine to become a liability.

Galbraith’s involvement in Ferneylea started with valuing the undeveloped site and subsequently providing consultancy to support an equity investor’s due diligence process. This involvement has now concluded with the preparation of the subjects for sale, subsequent marketing and dealing with interested parties to progressing to a successful transaction.

“Farmers are told land is irreplaceable, but this should not necessarily extend to a wind turbine," added Mr Innes. "It is another piece of metal machinery and without careful management will eventually end up around the back of the hay shed in a rusting heap.

“There is a time to harvest crops and sell animals for maximum yield, bearing in mind input of work, veterinary bills, maintenance costs and the rest. Similarly, turbines built in the past eight years may currently offer an opportunity for a substantial capital gain yet face declining value. This may be the time where the sensible thing to do is to take some cash off the table and use that to secure a firmer future.”