Merryn's Blog

Wind farms: how to pay to make it all OK

There is evidence that wind farms affect the price of nearby houses. But there is a simple solution to that, says Merryn Somerset Webb. Give a portion of renewable energy company their profits to their neighbours.

161031-windfarm-b

Wind farms do harm their neighbours there is "some evidence" that they cause "significant annoyance" thanks to "excessive noise". That is the conclusion of a new government report into turbines and it is a conclusion that will no doubt chime with the experiences of hundreds of people who live near turbines. So what should be done about it?

The obvious response from many will be to say that some types should be banned or perhaps that new ones should be prevented from going up within earshot of residences. But this might be a problem better solved with money.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

There is already evidence that the value of houses are hit hard when turbines go up near them (something accepted by the Valuation Office Agency). That's partly to do with their effect on the view and as this review makes clear partly because of the noise annoyance of living next to them. Who would pay the same for a house next to a wind farm as an identical one not next to a wind farm? Quite.

With this in mind, I have always been confused as to why the developers of big wind farms set up "community" funds to placate the people living around their projects. It would be much better, surely, to directly compensate the people who are most affected than to faff around building playgrounds and the like for lots of people who aren't. So why not pay part of the profits annually to those owning the nearest houses?

Advertisement
Advertisement - Article continues below

It could be calculated based on the present value of the pre-turbine price of the house, something that would mean that the homeowner could either continue to live in their house, neutralising the annoyance with cash, or sell it with the 25 years' worth of wind farm annuity attached (which should come to the same as the pre-farm value of the house). Problem solved.

The wind farm developers have always resisted this kind of solution on the basis that it would mean recognising that turbines have a negative effect on other people's standard of living. But if that's not up for argument any more, what's the problem with it?

PS for more along these lines see everything we have written in the past on the Land Value Tax. It is all the same sort of idea.

Advertisement

Recommended

Visit/economy/uk-economy/600792/were-near-the-tipping-point-for-electric-cars
UK Economy

We're near the tipping point for electric cars

Demand for electric cars is soaring soared. And while the switchover will be expensive, we could be near a tipping point.
6 Feb 2020
Visit/investments/commodities/energy/renewables/600762/investing-in-renewables-green-energy-bubble-fossil-fuels
Renewables

The “green” bubble is here. What could burst it?

Renewable energy, electric cars and the demise of fossil fuels – markets have embraced the green revolution with gusto. But there’s bound to be a snap…
4 Feb 2020
Visit/516638/will-solar-energy-investment-funds-keep-shining
Energy

Will solar energy investment funds keep shining?

Investment funds designed to profit from the solar energy have done well, but now look expensive, says Max King.
22 Oct 2019
Visit/516424/nuclear-fusion-is-getting-closer
Economy

Nuclear fusion – what it is, how it works and when it could be powering our lives

Securing unlimited clean, safe and carbon-free energy for the rest of time would be revolutionary for the world economy. Is this now within sight?
12 Oct 2019

Most Popular

Visit/economy/uk-economy/600837/rishi-sunak-new-chancellor-spending-splurge
UK Economy

Britain has a new chancellor – get ready for a major spending splurge

The departure of Sajid Javid as chancellor and the appointment of Rishi Sunak marks a change in the style of our politics. John Stepek explains what's…
14 Feb 2020
Visit/economy/600814/money-minute-friday-14-february-the-latest-from-rbs-britains-state-owned-bank
Economy

Money Minute Friday 14 February: The latest from RBS, Britain's state-owned bank

Today's Money Minute previews results from RBS – Britain’s state-owned bank – and from pharma giant AstraZeneca.
14 Feb 2020
Visit/investments/property/600826/living-on-a-houseboat-the-pros-and-cons-of-a-floating-home
Property

Living on a houseboat: the pros and cons of a floating home

Living on a houseboat sounds romantic and peaceful. But it’s not as straightforward as it looks, says Nicole Garcia Merida
14 Feb 2020
Visit/investments/commodities/600729/the-rare-earth-metal-that-wont-be-a-secret-for-long
Sponsored

The rare earth metal that won't be a secret for long

SPONSORED CONTENT – You can’t keep a good thing hidden forever; now is the time to consider Pensana Rare Earths and the rare earth metals NdPr.
31 Jan 2020