The decision to invest money in a renewable energy project will depend on how the level of return compares with any alternative investment. The value to the business can come either as an alternative income stream or in a reduction to costs, such as electricity, or a combination of both. The cost of borrowing and the potential performance of the technology need to be taken into account as well as the future cost of energy and inflation.

As a starting point to aid decision making, the College of Agriculture, Food and Rural Enterprise (CAFRE) has developed a selection of computer based payback calculators to give potential investors a rough guide to the number of years that it will take to pay off an individual renewable project.

The calculators have been developed for wind turbines, hydro and solar photovoltaic technologies and take into account the major factors that affect cost and level of output, together with the value of ROCs, electricity sold and electricity used by the business. Assuming that funding is available, from own funds or borrowings, you can use the calculator to calculate the number of years it will take the new technology to generate sufficient income to pay back the investment based on your own circumstances. This can greatly assist with the preparation of a business plan, which is desirable in any such project and a necessity if funding is to be sought from lending institutions.

The CAFRE payback model will be demonstrated as part of a business seminar delivered at the Practical On-Farm Renewable Energy event to be held at CAFRE Enniskillen Campus on 26 February 2014. The seminar will review a business plan to invest in a renewable technology project and will focus on efficiency of operation using typical costs under local conditions and returns involved in different types and scales of renewable projects.

The Practical On-Farm Renewable Energy event will be held at CAFRE Enniskillen Campus on 26February 2014. Topics covered will include seminars on all the major renewable energy technologies, the Renewable Heat Incentive (RHI), grid connection, planning reform, NI Renewable Obligation Certificates (NIROCs), and demonstration of the CAFRE payback calculators, as well as financing and preparing for funding applications. In addition, there will be a Trade Exhibition. The event will run from 1.00pm to 9.00pm. For further details, contact Connor Maguire at 028 6634 4852.

By Charlie Kilpatrick, Senior Business Technologist, Greenmount Campus