Community Wind Energy For Landowners: Is It A Good Investment?

In the push for a greener and more sustainable future, community wind energy is becoming a key part of the UK’s renewable energy landscape.

A community wind project is a locally owned development that produces energy to power local businesses, schools and many other uses.

While they may not be as prevalent as large-scale wind farms yet, these locally-owned developments are a critical part of hitting net-zero goals by 2050.

Now, these projects aren’t just about generating clean energy. They’re also about empowering local communities, fostering environmental stewardship and creating tangible economic benefits for all involved.

For landowners, community wind farms present an exciting opportunity to combine ethical investment with financial rewards while making a positive impact on the local community. Not only that, but these community wind projects can also result in more stabilised local energy prices over the longer term.

If you’re a landowner considering a community wind energy project on your land, we’re here to help. We’ll walk you through the key benefits and show how these projects can boost your income.

What Are the Benefits of Community Wind Energy?

Local jobs

Any community wind energy project will naturally create local manufacturing, transportation and construction jobs.

Generally, community wind energy projects will prioritise using local contractors and workers. This stimulates the local economy and will upskill the workforce to improve long-term career opportunities in the area.

For example, the average community wind project will need workers to:

• Manufacture materials required for the project
• Build access roads leading to the project
• Transport the supplies to the relevant building areas
• Maintain the facility once it’s built
• Carry out ongoing technical support on the site that will keep it running smoothly 

It’s also worth noting that construction and maintenance crews often use local accommodation, catering and other services throughout the project’s life. This usually gives an uplift to local hospitality businesses, making community wind energy a key contributor to regional economic development.

But that’s not all.

Revenue generated by community wind projects often directly supports local projects, such as sustainability initiatives or educational programs. These initiatives create jobs for educators, project managers and coordinators far beyond the original project’s reach.

Feeds directly into the local grid

Community wind energy in the UK feeds directly into the local grid, which can benefit the broader energy infrastructure in the area.

To give you some context, community wind turbines are usually connected to the local distribution network rather than the national transmission grid. This process is managed by Distribution Network Operators (DNOs) who oversee the smaller networks that deliver electricity to local homes and businesses.

With a localised connection, the energy generated by the turbines is first utilised within the nearby area before any surplus is exported further afield.

As a result, local communities will rely less on energy imported from larger, centralised power stations. 

Theoretically, this should stabilise energy distribution in rural areas around the UK where the primary grid can be less reliable. It also reduces the chance of transmission losses from the national grid, where energy can be lost as heat as it travels through the lines.

Although much of a project’s energy is used locally, any surplus is often exported to the broader grid. This surplus provides additional revenue to the local community through schemes like the Smart Export Guarantee (SEG).

Overall, community wind energy benefits landowners by increasing energy reliability. By feeding wind energy directly into the local grid, community projects enhance energy security and help landowners support their daily activities with minimal disruption.

Regular lease payments

Community wind energy in the UK brings regular lease payments to landowners through long-term agreements that span the life of an average turbine. This period is usually between 20 and 25 years, but can sometimes be longer.

Lease payments are usually structured as either fixed annual payments or royalty-based payments tied to the site’s output. 

Some agreements offer hybrid models (called multiple of outputs). These agreements include a base payment plus a bonus linked to the wind farm’s output, allowing landowners to benefit from higher energy production.

This isn’t true of all community wind power projects, but the terms for community projects are often more equitable than those for large-scale commercial wind projects with developers.

When thinking about your potential income streams, it is worth considering that wind turbines occupy only a small portion of land, leaving the majority available for farming or grazing.

This means landowners can continue their regular activities while benefiting from steady lease payments. Additionally, diversifying with a wind project can reduce dependence on volatile agricultural markets and seasonal revenue fluctuations.

Environmental benefits

The environmental benefits that come with community wind energy can be enormous. Although boosting renewables in the UK is always beneficial, community wind can mitigate climate change, reduce pollution and promote sustainable land use.

Of course, the main environmental benefits of community wind are shared with the more general benefits of wind energy.

Wind energy is a renewable energy source that produces no greenhouse gas (GHG) emissions during operation. So, by replacing fossil fuel-based electricity generation, community wind turbines reduce the UK’s carbon footprint and help meet the nation’s net-zero emissions targets.

In addition to reducing emissions, community wind reduces habitat destruction, soil degradation and water contamination often associated with fossil fuel extraction.

As mentioned, community wind takes up a smaller portion of land than larger-scale projects. This means that much more of a landowner’s site will remain available for agriculture, grazing or wildlife conservation.

If that wasn’t enough, community wind energy is also helping the UK transition to a generally decarbonised energy system. This reduces the risks associated with climate change, such as extreme weather events, rising sea levels and ecosystem disruption.

By supporting large-scale, commercial projects with community wind, we’ll be well on our way to a net-zero future.

While the primary environmental benefits are obvious, there’s also much to say about the role community-led wind projects play in raising eco-awareness.

Community-led wind projects typically involve residents in decision-making and highlight the importance of sustainability. For this reason, the projects usually foster a greater understanding of environmental issues and encourage a shared respect for the local area.

Income stays in the community

Along with creating local jobs, community wind energy in the UK is also designed to keep financial gains within the area it serves.

Most community-owned wind farms allow residents to take a direct stake in the project. Often, a site’s income is reinvested back into the community, such as in local initiatives, infrastructure improvements and providing financial returns to investors.

This, in turn, can encourage more investors to get on board with local projects, starting a positive cycle that boosts the community. These projects are often supported by local governments, making them financially viable.

As an example of a successful community wind project, let’s look at the community-owned wind farm run by Ripple Energy.

The Graig Fatha wind farm saved its 900 shared owners an incredible £16,185 on their energy bills in a month (March 2022, to be precise).

And that’s not all. The project has also:

• Generated 342,530 kWh of electricity (that’s enough to power 1,500 homes per month)

AND

• Saved 72,617 kg of CO2 (which is equivalent to planting 3,600 trees)

On top of these savings, almost £9,000 of the turbine’s earnings will help support local families in fuel poverty.

As the Welsh Government also owns a share of the wind farm, this allows them to redistribute their earnings to better help the local community.

Reduces Nimbyism

The final point to consider regarding community wind projects is the challenge of NIMBYism (‘Not in My Backyard’ attitudes).

Some people in the UK don’t necessarily want wind turbines in their area, as they believe they devalue house prices and surrounding land.

However, it turns out that community wind energy generally fosters support for wind infrastructure in general. This is because the shared funding it creates directly benefits the community.

Community wind energy projects also often foster open communication about design and noise impact, ensuring the locals feel heard.

With most planning applications for commercial projects, the conversation is generally between developers and planning committees. With community wind, there’s usually more revenue distribution and transparency in project goals.

As local communities have more understanding about what developers are building in their area, it can directly reduce NIMBY-ism.

Final Thoughts

As you can see, community wind energy offers significant benefits for UK landowners, providing a sustainable and steady income stream while also supporting environmental goals.

Landowners who host wind turbines on their property often receive lease payments or a share of the project’s revenue. This gives them more long-term financial security.

To round things off, community wind energy will be hugely beneficial for helping the UK reach its net zero obligations by 2050.

Are you ready to unlock the financial and environmental benefits of community wind energy? Have you been approached about a community project that you want to have a stake in? If so, Lumify Energy is here to help you turn your land into a sustainable asset. For starters, we’ll help you demystify complex lease terms of the average wind contract. But we’ll also help guide you through the project process to leave you feeling confident during negotiations.

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