Case Study

The Wind Turbine Developer

Businesses which invested in developing UK on-shore wind turbines were initially attracted by the advantages of the generous Government-backed Feed-in Tariff (FiT) and the opportunity to be pioneers in the promising and growing renewable energy sector.

Not only was the FiT guaranteed for 20 years from the date the wind turbine was erected, it was also index-linked to inflation. Developers were also rewarded for any power they could deliver to the grid, providing further incentive for investment.

But circumstances have changed, making UK on-shore wind turbines a less appealing business proposition for future developers. At the same time, those who have already invested find that there are fewer incentives to sustain or expand their wind turbine interests.

Most notably, the Government’s decision in 2015 to sharply reduce the level of FiT payments is likely to make the erection of new turbines unviable from a developer’s perspective. It also makes the replacement of existing wind turbines beyond their original guaranteed 20-year FiT funding period much less likely.

Wind turbine developers face additional pressures with investment funds harder to source and the requirement to continue funding any debts associated with the business. At the same time, it is becoming more difficult to locate wind turbine sites that provide both the necessary wind speed and easy connection to the power grid.

Fifty can help wind turbine developers free up their capital and reduce any debt through the acquisition of their wind turbine portfolio. It may also be possible to organise the purchase so that there is an immediate up-front, tax-efficient equity release payment.

The Fifty team are ready to hear from developers interested in finding out more about the benefits they can enjoy from selling their wind turbines. As a private equity-backed business, we have the money in place and have a fully qualified in-house team to ensure a prompt, secure and fair purchase process, all the way from initial enquiry, through valuation to eventual payment.

Furthermore, should the developer own the land on which the turbine or turbines stand, there is no obligation to sell the site. They can still enjoy the benefit of an on-going income stream through a leasing agreement with Fifty for the land, on an annual payment basis for the expected lifetime of the turbine – typically 20 years from installation. The option has built-in flexibility so that a larger initial payment can be organised with reduced annual lease payments, or a smaller upfront sum with proportionately larger lease payments.

To find out more please contact us by filling out our enquiry form.

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