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Barclays Plc (BARC), the U.K.’s second- largest lender by assets, created a 100 million-pound ($163 million) fund to support renewable energy farm projects.
The fund was developed with the National Farmers Union after a Barclays survey found that 37 percent of the U.K.’s 200,000 farmers are seeking to cut their energy bills and generate income using renewable energy, the London-based bank said today in a statement.
The U.K. reduced the incentives it pays to developers of large solar projects this year and is shifting its focus to funding smaller residential and commercial projects. The government aims to generate 15 percent of the country’s energy from renewable sources by 2020.
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Farmers “are looking forward to many further years of lower energy costs and a potentially new income as they sell energy back to the grid,” Travers Clarke-Walker, a product and marketing director for Barclays, said in the statement.
The average size of solar, wind and hydroelectric projects likely to receive financing through the fund will be 44 kilowatts, Barclays spokesman Michael O’Toole said in a telephone interview. The bank expects the costs of wind and solar projects to fall by half in the next three to five years and may increase its investments in renewable power. It bought Aug. 11 an 85 percent stake in a 26-megawatt wind farm in eastern England.
Barclays surveyed 300 dairy farmers in England, Scotland and Wales this month and 60 percent said they expect renewable energy to generate revenue for their businesses, according to the statement.
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Some are already doing so. Renewable energy “looked like a good investment because of government feed-in tariffs and we wanted to offset some of our business costs,” Andrew Hawkey, 58, a third-generation farmer from Cornwall, said in an interview.
Barclays financed a 250-kilowatt ground-mounted solar farm that’s in operation now on Hawkey’s land near Wadebridge, and he wants to borrow 120,000 pounds to add another 50 kilowatts of capacity. He said the solar panels may cut his power bills by about 30 percent.
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Source: Bloomberg