LONDON More than one third of UK farmers want to install renewable energy projects on their farmland, most of them within the next year, and hope to generate average returns of 25,000 pounds ($40,565) per year, UK bank Barclays said.
The bank's business arm on Tuesday launched a 100-million pound fund to help farmers finance renewable energy projects, including solar panels, wind farms, hydro plants and organic waste power as a growing number of agricultural businesses seek to benefit from government support tariffs.
"We want to signal very clearly to the market that we consider this to be a big future industry, a big opportunity for agricultural businesses and also a big opportunity for the renewables," said Barclays Business' Product and Marketing Director, Travers Clarke-Walker, whose team will be managing the fund.
"This is a quickly emerging industry."
A Barclays survey of 300 agricultural customers also showed four out of five farmers recognize renewable energy can save costs and 60 percent see it as a source of additional income.
The use of renewable energy on farmland has been brought to public attention in Britain by Michael Eavis, farmer and founder of the Glastonbury music festival, who installed over one thousand solar panels on his land.
The cost of installing renewable energy projects can be recovered after around 10 years, Clarke-Walker said.
The UK government slashed state support for large-scale solar plants earlier this month as it was concerned a few huge commercial projects would scoop up money intended for household and community projects.
Nevertheless, Clarke-Walker expects around 80-90 percent of projects will be solar and wind farms as they are cheapest to build and their costs are forecast to drop by up to 50 percent in the next three to five years as demand rises and technology improves.
Britain aims to generate 15 percent of energy from renewable sources by 2020, compared with 7.4 percent reached in 2010.
The fund's loan budget is unlimited and the first 100 million pounds could support well over 100 projects as the average cost varies between 250,000-700,000 pounds, Clarke-Walker said.
Suffolk-based farmer Mike Porter, who plants crops such as wheat and oil seed rape, received a 130,000 pound loan from Barclays to install solar panels on a grain store last month and is expected to make 20,000 pounds per year by exporting power to the national grid.
($1 = 0.616 British Pounds)
(Reporting by Karolin Schaps; editing by Keiron Henderson)