Now that your renewable energy project has been approved its time to raise finances, source your equipment, select a contractor to build the site, and arrange a Power Purchase Agreement.

Gaining planning approval for your project is a major hurdle leapt but there is a still a way to go before you cross the finish line. The next four tasks to complete are:

Raising Finances

When it comes to the cost of building a wind farm, a good rule of thumb figure is £1 million for each megawatt installed. It is unlikely that you, the project developer, will hold sufficient cash to fund the entire project and it is likely that you will need to borrow money from the bank or an investor or both.

It is likely that a bank will let you borrow approximately 70% of the cost of the project you plan to build.  They will charge you somewhere between 5-8% interest on the debt and will expect you to pay the debt back over a period of 10-15 years. The bank will expect you to raise the other 30% of the money needed, much the same as when you buy a house and you are required to put down a deposit. Some of this ‘equity’ may be raised from an investor. If this is the case they will expect to see a greater return in their investment than the bank and will expect to redeem their initial investment plus 25% over the life of the project.

There are banks that are especially interested in financing renewable energy projects such as the Cooperative Bank and Triodos Bank.

Choosing your equipment manufacturer

When you made your planning application you will have made a decision on the number of turbines and/or their size or installed capacity. There will be certain makes and models that will fit your criteria and now it’s time to choose the best turbines for you. The resource data at your site will help you make your decision and, if you have not done so already, now is the time to start monitoring the resources directly at your site using an anemometer or other data logging equipment.

Your resource data can be modeled with the performance of your shortlisted equipment and this will tell you which are likely to perform best at your site. These findings, the cost of the turbines and the operations and maintenance support the manufacturer can offer will guide your decision.

Selecting a contractor

The construction of renewable energy installations is carried out by specialist contractors. Often the renewable energy supplier that you have chosen will advise you to work with certain civil engineers that are experienced in working with the manufacturers systems.

Agreeing a Power Purchase Agreement

A Power Purchase Agreement (PPA) (link to ‘selling your power’) is the contract you hold with an electricity supplier for the sale of the electricity you generate. Good Energy holds contracts with hundreds of independent renewable generators across the UK and we are very interested to talk to you about purchasing your power.

If you are borrowing money from a bank, they will want to see a power contract in place before they will release funds. It is common that the bank will want to see specific terms in the power contract such as the length of the contract and a guaranteed price that the supplier will pay. Good Energy can tailor the contract to the needs of you and the bank, enabling you to get access to the finance you need.