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
Why not pay part of wind farm profits to those living nearby?

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.

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?

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.

Recommended

Is London’s office market a bargain?
Property

Is London’s office market a bargain?

Private-equity groups are swooping on London’s property companies, which are trading on steep discounts to net asset value.
23 Oct 2020
Big spending government is here to stay – just ask Rishi Sunak
UK Economy

Big spending government is here to stay – just ask Rishi Sunak

Governments around the world are splashing huge amounts of cash as they do “whatever it takes” to prop up their economies. John Stepek looks at where …
23 Oct 2020
Why negative interest rates are a lousy idea
UK Economy

Why negative interest rates are a lousy idea

The Bank of England’s governor says negative interest rates can encourage investment rather than having cash stashed in the bank. But is that really t…
22 Oct 2020
I wish I knew what negative interest rates were, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what negative interest rates were, but I’m too embarrassed to ask

There’s been a lot of talk from the Bank of England recently about introducing “negative interest rates”. So what on earth are they, and what would th…
20 Oct 2020

Most Popular

Negative interest rates and the end of free bank accounts
Bank accounts

Negative interest rates and the end of free bank accounts

Negative interest rates are likely to mean the introduction of fees for current accounts and other banking products. But that might make the UK bankin…
19 Oct 2020
How will we repay our vast debt pile? Do we even need to?
Sponsored

How will we repay our vast debt pile? Do we even need to?

In his recent articles looking at different aspects of the fixed-income investing world, David Stevenson looked at inflation. Today he looks at a clos…
19 Oct 2020
Buying bitcoin could be the best way to play the remote working boom
Bitcoin

Buying bitcoin could be the best way to play the remote working boom

The coronavirus pandemic has accelerated the move to home working, flexible employment practices and the rise of the “digital nomad”. One of the best …
21 Oct 2020