Renewable energy in agriculture

Renewable energy in agriculture
Renewable energy in agriculture:
A farmer’s guide to
technology and feasibility
Renewable energy in agriculture
NSW Farmers Association
PO Box 459
St Leonards NSW 1590
Head Office: 02 9478 1000
Member Service Centre: 1300 794 000
Authors: Gerry Flores, David Eyre, David Hoffmann
© NSW Farmers Association and the
NSW Office of Environment and Heritage
All rights reserved
[insert ISBN]
Citation information: Flores G, Eyre D N, Hoffmann D,
[insert title] NSW Farmers, 2015
First edition, May 2015.
A farmer’s guide to technology and feasibility
4. Foreword
5. About this guide
6. Overview
8. Solar Photovoltaics (PV)
16. Wind power
22. Solar hot water
26. Bioenergy
30. Ground source heat pumps
34. Financial assessment
42. Farm energy planning
46. Looking ahead
47. Bibliography
Renewable energy in agriculture
At NSW Farmers we believe that energy
security has become a first order
business risk for agriculture. Simply
put, we must do everything we can to
increase energy efficiency and to reduce
exposure to projected increases in the
cost of diesel, gas and electricity.
Fiona Simpson
NSW Farmers
One way to reduce this exposure is to make some or
all of our own energy.
Farmers are well placed to generate energy, having an
abundance of land to install infrastructure and access
to sunshine, wind and waste material, all of which are
potential sources of cheap and reliable power. Further,
the technology is maturing rapidly with falling prices
and improved performance making return on investment
more attractive each year.
Pretty well every farmer I speak to is curious about
renewable energy and many of our members have found
great success across the various technologies including
solar, wind and bioenergy. An outstanding example
is the Beveridge’s pig farm, near Young, where they
generate all of their farm electricity from effluent and
also sell excess power to the network.
Every farm presents different opportunities for energy
generation. This guide sets out the key options and
provides examples of what is possible with today’s
technology. While it cannot take you all the way
down the road to energy security, we hope that you
find it to be a useful companion on a fascinating and
rewarding journey.
A farmer’s guide to technology and feasibility
this guide
This guide has been produced by
NSW Farmers with the assistance of the
NSW Office of Environment and Heritage
as part of a program to help regional
NSW achieve faster uptake of renewable
energy and increased energy security.
Intended as a general resource for farmers, it provides
basic technical explanation and description of the most
common types of enterprise-scale energy generation
currently available in Australia.
Some of these technologies are more mature than
others and some are more applicable for certain
properties and farm types. They also vary widely in scale
and cost, from small free-standing systems to major,
grid connected infrastructure, potentially jointly owned
and operated by communities.
Along with technology description, we discuss general
design and financial considerations and provide some
illustrative case studies.
The best solutions for on farm energy generation tend to
be tailored to meet the needs of the farm rather than“off
the shelf”. Every farm will benefit from a customised
design approach matching production strategy and
other site-specific variables. While this guide highlights
common issues and situations, we recommend seeking
expert advice before locking in to a particular solution.
Renewable energy in agriculture
Recent advances in renewable energy technology have reduced costs, increased
reliability and placed energy generation within the reach of most farms.
Increasingly, Australian farmers are switching from diesel,
natural gas, LPG and electricity to renewable energy sources in
core farming applications.
This is both as a hedge against future energy price increases
and to mitigate the risk of electricity supply disruptions and
power quality issues experienced at fringe-of-grid.
The degree of adoption of renewable energy varies widely
across sectors. Adoption is highest in intensive, facility based
sectors. An estimated 40 percent of dairy farms have already
installed some form of renewable energy, such as heat pumps
or solar thermal water heating, often with a booster (Clean
Energy Finance Corporation 2014).
As a generalisation, large scale adoption of renewable
technology (fully or largely replacing fossil-fuel based energy) is
lowest for farms that have highly variable energy demand since
this can impact favourable return on investment.
Small scale adoption is occurring across all sectors, with
various solar technologies being most popular.
An important emerging area is the recycling of agricultural
waste streams to produce heat and power. For example:
• Biomass power generation: Darling Downs Fresh Eggs
is installing an anaerobic digester and generators to meet
100% of the company’s non-peak power requirements
using chicken manure and other waste (Clean Energy
Finance Corporation 2014).
• Biogas heat generation: The pork industry has been
at the forefront of biogas capture and heat generation
for some time, with farmers both generating energy and
claiming credits for methane destruction.
Waste to energy schemes have the added benefit of reducing
waste management cost and assisting farmers to meet
environmental compliance standards.
The energy management pyramid. The four steps towards energy
management are (1) Energy analysis, (2) Energy conservation/
time of use management, (3) Energy efficiency, and (4) Renewable energy.1 Energy analysis provides the foundation for effective
investment in subsequent steps.
A farmer’s guide to technology and feasibility
Many farmers have already invested in solar PV, incentivised by
feed-in tariff schemes such as the NSW Solar Bonus Scheme
and benefits derived from Small-Scale Technology Certificates.
While premium feed in tariffs are being wound back (ending in
NSW in 2016), solar PV is still an economically viable option for
many applications.
Lower cost and advances in battery storage technology is
making off-grid power supply to farmers on the fringe of the
electricity network increasingly attractive. This will continue to
support the adoption of solar PV, with the pace of change in
the solar PV market expected to accelerate in coming years
(Energetics, 2014).
Investing in renewable technology –
a strategic approach
Achieving good outcomes from investment in renewable
technology depends on selecting the right technology,
designed and specified to meet the specific nature and needs
of your business.
A good starting point is to gain familiarity with the various
technologies and the key factors that determine suitability for
different properties.
The following chapters outline the most well-known and
proven renewable energy technologies and their key design
and cost considerations.
Before locking into a solution, it is important to clarify your
broader farm energy management strategy.
NSW Farmers has delivered energy assessments on farms
across NSW and across all sectors of agriculture. In our
experience, analysis of a farm’s energy consumption profile,
production system and site characteristics, quickly narrows
down the kinds of renewable technologies that may be
suitable. It also helps to clarify priorities for investment in
energy savings.
In general, we recommend that you prioritise savings from
general energy management and efficiency before investing
significant capital in a renewable project.
Calculating optimal system size and assessing return on
investment for your renewable project will be difficult if you
have not first minimised energy wastage and established an
accurate energy baseline for your property.
The energy management pyramid shown in Figure 1 indicates
the place of renewable energy in a general farm energy
management strategy.
Benefits of renewable
energy technology
Protection from rising electricity, gas and diesel prices.
Security of supply. Electricity users in rural areas
being the fringes of the network are often prone to
high rates of brownouts, blackouts, or voltage spikes.
Likewise, farmers in remote areas are the first to suffer
from restrictions to diesel supply.
Flexibility. Renewable energy can supplement existing
energy sources. There is often no need to become
fully energy self sufficient. A farmer who can generate
energy can make market based decisions as to when
to buy (use) or sell (export) energy.
Flow-on savings. Installation of farm generation
will typically be associated with energy efficiency
measures such as automated control systems which
help protect equipment, reduce maintenance costs
and extend equipment life.
Regional and community benefits. Displacing a
portion of your electricity demand can sometimes
help stabilise local voltages and reduce the likelihood
of your area experiencing outages from a tripped
transformer. This can eventually help to lessen
the need for costly network upgrades (which have
significantly driven up electricity costs in recent years).
Community energy projects. NSW Farmers supports
community energy initiatives where rural stakeholders
collaborate to share the costs and benefits of
renewable energy projects.
Green credentials and product differentiation.
Incorporating renewable energy can help reduce
environmental impacts from your farm and provide
an enhanced marketing platform for many products.
Differentiation through “carbon-neutral” or “sustainably
grown” wines, eggs, dairy or other products can add
value to a product through customer perception and
increased demand.
Capitalise on energy and carbon markets.
Surplus energy generated on farm can be sold directly
to other users or into the energy market. Verifiable
carbon abatements or other environmental credits can
be claimed through government or privately-supported
market exchanges.
Improving the environmental sustainability of
your property. Minimising fossil fuel use can have
multiple environmental benefits both on farm for the
broader environment.
1. Recent decreases in the price of solar systems have in some cases made investing in solar more financially attractive than investing in energy efficiency first
Renewable energy in agriculture
Photovoltaics (PV)
Solar Photovoltaics (PV) energy is ideal for Australia due to our long sunny days and
the scalability, reliability and relatively low cost of the technology. For these reasons
it has become immensely popular with householders, and both small and large
business in every sector.
During financial year 2010-11 solar PV overtook biogas
and wood/bagasse, and became the third largest source
of renewable energy for generation of electricity in Australia
(after utility-scale hydro and wind). The amount of electricity
generated from PV has continued to grow and has sustained
an average year-on-year increase of 56.4% over the last 10
years. In 2013 solar PV generated around 1.5% of Australia’s
electricity supply (BREE, 2014).
Photovoltaic systems have been in use for over fifty years and
are a proven and stable technology. Solar photovoltaic systems
now generate close to one percent of the planet’s total power
needs, and in Germany they provide around seven percent of
the yearly national electricity supply (Fraunhofer ISE, 2014).
Australia has immense potential for growth in photovoltaic
power supply, with perhaps the largest opportunities existing
in agriculture. Currently the great majority of PV systems in
Australia are small domestic installations. This is in contrast
to Europe where capacity is split into thirds across domestic,
enterprise and utility installations.
Solar in agriculture
• Diesel-solar hybrid power generation sets: These can
provide a cost-effective and reliable supplementary power
supply in remote and regional areas.
• Free standing small solar where the cost to run power
lines is high and the low maintenance nature of solar is highly
beneficial. For example, for stock water pumping to replace
diesel pumps or wind mills. These systems are best suited
for transfer pumping to interim storage tanks.
• Larger scale solar systems for irrigation. Farmers with
high but seasonal irrigation energy demand are candidates for
projects to augment mains power supply enabling load shifting
and sale of excess power.
Since the conversion of sunlight to electricity occurs without
any moving parts, solar PV is a technology that requires little
maintenance and is highly reliable.
One of the strengths of solar technology is its scalability.
A solar system can be sized to power a single water trough
pump in a remote corner of a paddock; an entire intensive
animal or horticulture farming facility; theoretically, it can be
sized to meet the needs of irrigation pumps moving millions
of litres of water.
Solar photovoltaic (PV) applications are already widely adopted
in intensive agriculture, and increasingly by broad acre farmers
and pastoralists.
How solar PV works
The most common applications are:
A Solar PV system is typically comprised of two major
components; the panels and an inverter.
• Facility based installations to supply electricity for
intensive animal and horticultural production. These are
typically mounted on the roofs of sheds and are often
integrated with general farm electricity supply
Solar PV panels contain semiconductor devices (solar cells)
made of materials such as silicon that use the photoelectric
effect to generate electricity.
A farmer’s guide to technology and feasibility
Solar Photovoltaics (PV)
Figure 1: Australian electricity generation,
by fuel type (2012–13)(BREE, 2014).
Figure 3: Simplified cross section view of a typical solar cell.
Figure 4: Typical grid-connected solar PV system (simplified).
Figure 5: Most farms make use of small or large
pumps to meet their water needs. Solar systems can
be arranged to provide power to pumps directly, or in
tandem with other energy sources like diesel.
Renewable energy in agriculture
Energy from incident photons (in sunlight) is absorbed by
the semiconductor by ‘knocking’ electrons loose from their
atoms. These electrons are then ‘collected’ and, due to the
composition of solar cells, can only flow in a single direction.
Generally, multiple solar cells are connected in an array to
generate a usable amount of direct current (DC) electricity.
The generated DC electricity is fed to an inverter, which
converts it into alternating current, at the right voltage (AC
230–240V in Australia), so that it can then be used by most
appliances. Any excess electricity generated can also be
exported to the main electricity grid. This setup, known as a
‘grid-connected’ system, is the most common, and will handle
the use and export of power automatically.
Although users can continue to use electricity without adjusting
any of their habits, shifting the use of equipment to times when
the solar system is generating power may provide substantial
savings to their energy bills.
Solar PV generators can be commissioned for varying
purposes and may require different control systems and
components. The relationship between generated solar
power and its industrial application must be considered in an
integrated way. Depending on your requirements, you may
need additional components such as batteries for storage,
or control systems to incorporate your electrical loads so
that power levels match your solar generation.
Design factors
Before commissioning a solar system a site assessment
should be conducted to address the characteristics of your
property and energy use. There are many variables to consider
when establishing optimal size and configuration of system.
Key design factors are discussed below.
Solar resource
The levels of solar irradiance change throughout the day and
year. Mornings and afternoons have lower levels, and summer
has higher levels than winter (seasonal variations in NSW can
entail changes in PV power output of 50%). Solar radiation
available will also vary for sites with different latitudes and
different climates (e.g. a region highly prone to overcast or
rainy days will have a reduced solar resource).
Units of Power and Energy
and Peak Sunshine Hours
kW (kilowatts) is a unit of power.
kWh (kilowatt-hours) is a unit of energy.
1 kWh is equal to the energy delivered by a generator
supplying 1kW of power continuously for one hour
(hence the term ‘kilowatt-hour’).
Solar radiation power is measured in kW/m², while
solar radiation energy is measured in kWh/m².
1 kWh/m² is also known as 1 Peak Sunshine Hour
You can use the Clean Energy Regulator’s (CER) ‘Postcode
zones for solar panels’ list to determine the typical electricitygenerating capacity of your location2. Most postcodes in
NSW fall under Zone 3, which means that a 1kW system will
generate around 1,400 kWh of solar energy in a year.
Estimated yearly
kWh generated /
kWp installed
generation per
day (kWh)
Table 1: Clean Energy Regulator’s (CER) ‘Postcode zones for
solar panels’
More detailed information of the specific solar resource
available can be obtained through resources provided by
the Bureau of Meteorology (BOM)3 or from propriety sources
such as the Australian Solar Radiation Data Handbook from
Exemplary Energy4.
Placement and orientation of panels
System panels can either be mounted on a roof or comparable
structure, or you can build a racking frame to mount the panels
(if the roof is shaded or not-suitable for panel installation). Roof
mounted systems tend to be less expensive, as the racking
frame components are not required.
The optimal orientation, to generate the most energy
over the year, for a system on the southern hemisphere is
facing north. However, depending on the energy profile and
requirements of the farm, it may be useful to orient the system
further westward (to increase solar generation in the evening)
or eastward (to increase solar generation in earlier hours of
the morning).
The optimal tilt of a system, to generate the most energy over
the year, is equal to the latitude of the site. However, a steeper
pitch may be used to increase the average solar generation
in winter months, or a flatter tilt can be used if greater solar
generation is desired during summer months.5
The system output will also vary depending on the presence
or absence of shading and ambient temperature. In some
circumstances efficiency can be increased through the use
of tracking systems (one – or two-axis), which can provide an
increase of approximately 10-25 percent in efficiency. Tracking
adds significant cost, however, and generally this outweighs
the benefit of increased yield.
Panels and inverters should be placed as close as possible
to each other, as running power long distances can be both
dangerous and expensive, and can lead to transmission
losses, which will downgrade the amount of usable power
from the system.
A farmer’s guide to technology and feasibility
Figure 2: If roof space is not available, solar panels can be installed on
a ground mounted frame.
Solar Photovoltaics (PV)
Figure 6: Solar radiation intensity through the day for summer and
winter seasons (GSES, 2015).
Figure 7: a) A lower tilt – greater solar power generation in summer; b)
A tilt equal to site’s latitude – greatest annual solar-power generation;
c) A steeper tilt – greater power generation in winter.(GSES, 2015).
Figure 8: A single-axis tracker will result in higher power output from
a solar PV array in the early mornings and evenings. Cooler morning
temperatures mean that the array’s morning output will be slightly
higher than its evening output; a module’s power output reduces as it
heats up. (GSES, 2015).
Renewable energy in agriculture
Potential for network connection
In NSW and most Australian states, exported excess power
generated from a new renewable energy system can be
rewarded through feed-in-tariffs (IPART, 2013). However, the
solar bonus scheme has been closed to new entrants, so
in NSW the revenue offered per kWh of exported energy is
reflective of the wholesale price of electricity, around 3 to 8
cents/kWh; depending on your location For new renewable
systems, every kWh that is generated can lead to 25-35c/
kWhof savings if the energy is used on-site. Property owners
considering a grid-connected solar PV system should ensure
that the size and cost of their system and the expected
savings meets their expectations.
In an off-grid (stand-alone) scenario, proper sizing of a PV
system will not involve the dynamics of how much energy will
be exported vs. used. Instead, it is pivotal to consider the size
of the array and energy storage (e.g. batteries) in relation to:
Is significant power used during
daylight hours and consistently
through the year?
• Average daily energy use.
• Days of autonomy required (i.e. How many consecutive days
of little-to-no sunshine is expected, and what battery bank
and PV system size can provide sufficient power through
these days and allow solar PV array to replenish the batteries
quickly once it is sunny again?).
• Large loads that need to be met.
Financially, it is usually better to size a stand-alone solar system
to meet the typical ongoing energy needs of the property. A
diesel generator can then be installed for backup power and to
charge the batteries in an event where the batteries have been
drained and there is little or no solar resource.
Types of solar panels
Solar systems generate electricity when the sun is
shining on them, but do nothing when they are shaded
or dark. Electricity can be expensive to store so any
generated energy that exceeds a dwelling’s immediate
needs is usually exported (fed back) to the local grid
(for grid-connected systems). However, under current
tariff rates for exported electricity (from zero to 8
cents per kWh), it makes more financial sense to use
electricity generated by solar PV on site rather than
exporting to the grid.
There are two main types of commercially available Solar PV
technologies: crystalline silicon panels and thin film panels.
Crystalline silicon panels currently hold the majority of the
market and also represent the bulk of all installed capacity.
Within crystalline technologies there are two main variants:
monocrystalline silicon cells and multicrystalline silicon cells.
Monocrystalline solar cells are more efficient, but recent
improvements in technology have meant that in many cases
the performance difference between monocrystalline panels
and multicrystalline panels is close to negligible.
There are various types of thin film panels, however;
amorphous silicon panels are the most commonly available
commercially. Thin film panels also tend to be cheaper than
crystalline panels but are also less efficient, so they will require
a larger area to achieve the same power output.
Figure 9: An indicative example showing that the payback time
for a grid-connected system will rise quickly after a certain
system size is reached. This is because past a certain point,
larger systems will only serve to generate more electricity to
export and will not offset the more expensive electricity which
is consumed. This relationship will be different for farms using
more/less power or at different times of the day.
Larger PV systems will generate more electricity but, as
systems get larger, a greater portion of power will be exported
instead of used to offset your own consumption. The effect
of this is that the system will take longer to pay itself off. This
dynamic is illustrated in the figures opposite. These scenarios
do not address benefits than can be achieved through load
shifting on farms that have multiple sources of electricity
demand. To maximise the benefit from a solar system, it is
important to consider how solar power can be allocated
across different electricity uses on farm to reduce network
charges in high tariff periods.
It is important to remember that not all panels with equal
wattage ratings are made equally. The importance of solar
panel selection lies in ensuring that the product is covered by
strong warranties (industry standard is 80% of nominal power
after 20 years) and that the panels have a significant and
reputable presence in Australia.
The solar industry also categorises solar panels and their
manufactures into tiers. Products from a tier 1 manufacturer
are considered the best, while ’tier 2’ or ‘tier 3’ products may
indicate lower quality. However, interpretation of tiers may vary
depending on suppliers (see Figure 12 for guidance provided
by Pike Research).
The inverter – a critical component
Inverters convert the direct current (DC) electricity generated
by solar panels into the Alternative Current (AC) electricity that
most appliances and equipment require. Inverters also use
electronics to optimise the output from the panels.
More advanced inverters can also be connected to multiple
independent ‘strings’ of panels. This feature is useful if different
strings will have some panels receiving shade or oriented in
different directions.
Solar Photovoltaics (PV)
A farmer’s guide to technology and feasibility
3 kW System
5 kW System
7.5 kW System
System Cost: $4,800
System Cost: $8,000
System Cost: $12,000
Portion of power offset: 94%
Portion of power offset: 73%
Portion of power offset: 52%
Portion of power exported: 6%
Portion of power exported: 27%
Portion of power exported: 48%
Savings per day: $3.52
Savings per day: $4.76
Savings per day: $5.45
Savings per year: $1,286
Savings per year: $1,738
Savings per year: $1,988
Simple payback (years): 3.7
Simple payback (years): 4.6
Simple payback (years): 6
Figure 10: An example comparing three grid connected solutions and the expected generated power that will be consumed, the generated power
that will be exported and the simple payback rates of each system.
Figure 11: Common types of solar PV panels.
Figure 13: Residential solar PV system pricing trends since September
2012. Data points are the average $dollar per Watt for each system
size (1.5kW–5kW until November 2013, then also including 10kW from
December 2013). (Solar Choice, 2014).
Figure 12: Different tiers of solar panels
(SolarChoice; Pike Research, 2013) 6
Renewable energy in agriculture
The electronics used by inverters can be sensitive to heat
and other stresses so inverters should be installed out of
the sun (shaded) with appropriate ventilation for cooling.
Inverters are usually the first thing to fail in a solar PV system,
so it is important to verify the warranty in case there is a
problem or a component needs replacing. Standard industry
inverter warranties will cover a range of faults up to10 years.
It is prudent to obtain reputable inverters that have a good
presence in Australia.
Future developments in solar will likely include a continued
reduction in prices (which have fallen over 66 percent from
2010–2014) and moderate gains in performance efficiency, as
technologies and manufacturing processes are refined.
A major factor in solar PV system design is the price of energy
storage. Battery technologies have continued to improve, and
the cost of batteries continues to fall as production and design
Since the energy source for solar PV is essentially free and
abundant (sunlight), the only ongoing costs for this technology
are maintenance and repair. A fixed-tilt solar PV system has no
moving parts, and is designed to withstand regular wear and
tear under normal weather conditions.
Looking at a PV System’s ultimate “per-watt” cost can help
you to assess different proposals. Panels are rated for a certain
number of watts per panel (typically between 160 and 275
watts for standard sized panels). The same goes with inverters,
which can vary greatly in price and quality.
There are resources available online which aggregate and
publish average prices for various PV systems in metropolitan
areas (usually every month). These can serve to give an
indication of the prices to expect, however, installing in rural or
regional areas may incur additional costs due to transport and
other factors.
In 2014 the average indexed price of PV systems of all sizes
(and inclusive of discounts from generated small technology
certificates) was around 1.8 dollars per installed watt6.
We recommend that you research pricing widely on the
internet. It is important to compare quotes from different
installers. There are services that will take your details and
contact several installers so that you can compare the quotes
that they will offer.
Examples of these services are:
Future innovation/technological maturity
Although Solar PV has been around for decades and is an
established technology, its component designs continue to
evolve and improve.
The efficiency of solar cells has increased progressively
over the years. Efficiencies attained at research labs for
‘mainstream’ crystalline silicon cells have improved from
around 15 percent to over 25 percent over the last 30 years.
Some of these improvements have transferred to commercial
cells meaning solar modules today can achieve efficiencies in
the range of 18–20 percent. Other types of solar cells have
achieved even greater conversion efficiencies but these tend
to be prohibitively expensive so their main use has remained
in niche applications. Australia has been a leader in the
development of the technology with breakthroughs in cell
efficiency developed by research teams from the University of
The majority of solar PV panels are made with crystalline
silicon. Typical commercial crystalline silicon cells are currently
around 20 percent efficient, meaning that the solar radiation
they convert to electricity is approximately 20 percent of
the total incident solar energy. Other solar cell materials
can achieve higher efficiencies, but are generally far more
expensive to produce, and are therefore still mostly limited to
research or high-tech projects.
As battery storage becomes more affordable, the business
case for solar PV will change, and it may become more cost
effective to size solar systems with storage to cover additional
loads of a property, rather than supplementing an existing
electrical grid connection.
Existing solar PV systems can be upgraded with additional
panels to generate additional power.
More information
Clean Energy Council guide to installing Solar PV for
businesses in NSW:
AgInnovators – Solar photovoltaic energy on farm:
A farmer’s guide to technology and feasibility
Solar Photovoltaics (PV)
Figure 14: Solar PV cell efficiency records (National Renewable Energy
Laboratory, 2014).
Figure 15: PV technology status and prospectus. © OECD/IEA 2010
Solar Photovoltaic Roadmap, IEA Publishing. Licence: (
2. T
he Clean Energy Regulator (CER) determined four broad zones, based
on climate and solar radiation levels, within Australia. A Small Technology
Certificate (STC) multiplier expressed as MWh/kW installed capacity
is provided for each zone; this can be used as a general planning
assumption. The ranges of postcodes and their corresponding zones
can be found on the website (
5. The tilt angle of solar panels varies depending on latitude. A tilt angle
of 30.2 degrees is optimal for Sydney. Solar PV suppliers will model
the most appropriate tilt angle for your project; however, often this is
determined by the pitch of your roof.
6. For more info see:
Renewable energy in agriculture
Wind power
Wind mills are one of the longest established renewable energy technologies and
have long had a place on Australian farms. These mills have generally operated as
a direct drive, or to drive a small electricity generator for dedicated purpose – for
example, topping up a stock water tank.
In recent years, however, a range of small to medium scale
wind generators have come on the market that may be
suitable for meeting some of your farms electricity needs.
Being smaller and lower, farm-scale wind turbines can avoid
the planning disputes sometimes associated with commercial
wind farms. Wind energy is worth consideration by farmers in
locations with predictably high wind.
Commercial scale wind farms
Commercial wind farms convert wind energy to
electricity for supply to the national grid and can
generate 1MW or more of electricity. This scale of
generation is not generally practical for individual
farms as the amount of power generated far exceeds
the needs of the farm. There is, however, the possibility
of leasing farm land to wind energy companies.
Information on this subject is available in the NSW
Farmers “Wind guide for host landowners.”
How wind power works
A typical farm-scale wind system consists of a turbine, a
tower, a controller, a grid-connected inverter and a meter. The
controller ensures that the turbine operates within safe limits
and rectifies the varying frequency alternating current (AC) to
direct current (DC) power. The DC power is then passed to the
inverter, which converts it into AC power of the same voltage
and frequency as electricity from the grid.
Typical farm scale turbines have a tower height of
approximately 20 metres. Winds speeds follow a generally
increase with elevation, so maximising turbine hub height is
important in developing a financially viable project.
Types of wind turbines
Wind turbines are mainly divided into vertical and horizontal
axis designs. The common, three blade design that is often
associated with large scale utility wind turbines is an example
of a horizontal axis wind turbine. Horizontal-axis turbines are
more efficient than vertical-axis, but can be more difficult to
repair (since mechanical components are located in the nacelle
at the top of the tower) and can also be more expensive.
On a horizontal design, the “blades” of the windmill are
attached in the parallel direction of the shaft, and mechanical
components are often at the bottom of the shaft, making them
more readily accessible. On these designs, the entire shaft
sometimes turns with the blades, and drives the mechanics/
power generation at the bottom of the design.
A farmer’s guide to technology and feasibility
Wind power
Figure 16: Monopole horizontal axis wind turbine and upwind turbine orientation (Stapleton, Milne, Riedy, Ross, & Memery, 2013) (left). Typical
components of a domestic wind turbine (right).
Figure 17: 3-Bladed Horizontal Axis
Wind Turbine (HAWT).
Figure 18: Giromill Vertical Axis Wind
Turbine (VAWT)
Figure 19: Giromill/Darrieus Vertical Axis Wind
Turbine (VAWT) with helical blades
Design factors
Wind resource
A good wind resource cannot be guaranteed for any given site,
yet it is critical for the viability of a wind turbine. It is essential
to first consider the characteristics of your farm and assess
whether it’s suitable for a wind turbine. The financial case for
small wind generators is not as attractive as comparable solar
PV systems if the wind resource isn’t excellent.
The first step is to establish the general strength and
consistency of wind at your farm’s location. If your property
does not have adequate wind speeds, consider solar
or another type of renewable technology. Payback and
investment with wind power is very dependant on wind
availability, so strict calculations should be made before
proceeding with project planning.
Some turbines are designed to be mobile or demountable for
easy relocation in response to seasonal wind patterns or the
need for power generation at a specific site.
Figure 20: A pickup vehicle is used to raise and lower
a monopole tower. Collapsible towers may be placed
around the property with ease and, in some cases,
moved within a property to match changing wind
conditions from season to season (Energy Matters, 2013)
Renewable energy in agriculture
Wind maps, with location information on historical levels of wind, are critical components in the wind power system design process.
Wind resource maps for NSW are given in Figure 21 (below).
(NSW Government Planning and Environment;
Windlab Systems Pty Ltd, 2013). Orange
areas indicate higher average wind speeds
Map of NSW renewable energy projects. Green
areas indicate highest wind resource (NSW
Trade and Investment, 2014)
NSW Wind Atlas (reproduced from (Sustainable
Energy Development Authority (SEDA), 2002))
A farmer’s guide to technology and feasibility
Wind power
Figure 22: Local site characteristics which may improve or affect performance of wind turbines (Energy Matters, 2013)
Ridge tops
Strong prevailing winds typically blow from
the ocean and can dramatically improve the
performance of a turbine situated by the
Wind compresses as it blows over hills and
can therefore increase wind speeds close
to the ground, suitable for shorter towers.
Note that a minimum hub height of 10m is
Wind shears may occur after encountering
steep cliffs. This will impact a wind turbines’
performance so placement away from
turbulent winds is critical.
A wind turbine may be viable for your property if it’s located
in a high wind resource area (orange areas on left map or
bright green on right map). You may refine your assessment
by obtaining information on the mean wind speed for your
‘region’ from the Bureau of Meteorology (BoM)8. An average
wind speed of around 5 m/s or more is usually required at hub
height for a suitable system. Remember however, that data
obtained from the BoM is just a proxy, as on-site conditions will
impact the particular wind speed at your location. In addition,
wind speed measurements taken by the BoM are typically from
a height of 10m, so extrapolation to turbine hub heights can
be required. This can be done using the power law or log law
equations (see workings in Figure 23).
If you are not in a high wind area it is unlikely that your site
will be suitable for a wind turbine. However, certain ridges
or specific locations can sometimes still have sufficient wind
resource and may warrant investigation.
Once the average mean wind speed at hub height is known,
it is necessary to determine the distribution of wind speeds
(that is, how often any particular wind speed occurs). An
approximation, such as the Weibull distribution can be used
(Figure 24). However, this distribution must be redrawn for the
particular mean wind speed of your property.
Conduct a wind resource study
(essential for large projects)
If you are considering a large project (installing 20kW
or more), it is essential to undertake a technical
and financial feasibility study to determine optimal
system characteristics such as positioning, sizing
and orientation of wind turbines; as well as expected
performance, yield, financial savings and payback
rates. . A wind study for a farm scale wind turbine can
cost between $3,000 and $15,000 per site with some
companies offering credit to the property owner if the
installation goes forward. These studies usually involve
site visits, wind measurements, and can take anywhere
from a week or two to several months.
Wind with other technologies
Wind and solar technologies can be complementary. Wind
is often available at night or when clouds or rain are blocking
the sun. Likewise, sunlight is often available on clear, calm
days, when there is minimal wind. On a single-property scale,
farmers are cautioned not to overcapitalise by installing more
generation capacity than is necessary or financially sound.
Situations that justify the installation of a wind turbine and solar
PV tend to be niche off-grid scenarios.
Figure 24: Typical Weibull distribution.
For example, a standalone (off grid) system design may be
able to reduce its required battery bank capacity, if a wind
turbine is available to top up batteries at times when the solar
PV array isn’t producing energy (i.e. at night). The financial
case of such decision has to be compared with the alternative,
which is likely to be adding more solar panels and increasing
the size of the battery bank). Generally, in most grid connected
properties, there is little need to install a solar PV system
AND a wind generator, unless there are space restrictions
which prevent the expansion of solar PV, or if a wind turbine is
expected to provide some substantial advantage by generating
at night-time hours.
Renewable energy in agriculture
Calculating and extrapolating average wind speeds from measured
data at different heights
There are two equations which permit you to estimate mean wind speed at different altitudes. These are shown below.
Power law equation
Log law equation
v1 = Velocity at height h1
v2 = Velocity at height h2
h1 = Height 1 (lower height)
h2 = Height 1 (upper height)
a = wind shear exponent
This method first requires one to calculate the wind
shear exponent by using two known wind velocities from
different heights:
v = Velocity at height h
z = Height above ground level for velocity v
vref = Known velocity at height href
href = Reference height where vref is
z0 = Roughness length in the current wind
Length ()(m)
Landscape Type
Water surface
Inlet water
Completely open terrain with a smooth surface, e.g. concrete runways in airports, mowed grass, etc.
Open agricultural area without fences and hedgerows and very scattered buildings.
Only softly rounded hills
Agricultural land with some houses and 8 metre tall sheltering hedgerows with a distance of approximately 1250 metres
Agricultural land with some houses and 8 metre tall sheltering hedgerows with a distance of approximately 500 metres
Agricultural land with many houses, shrubs and plants, or 8 metre tall sheltering hedgerows with a distance of approximately 250 metres
Villages, small towns, agricultural land with many or tall sheltering hedgerows forests and very
rough and uneven terrain
Larger cities with tall buildings
Very large cities with tall buildings and skyscrapers
Calculated with a = 0.11978, Z0 = 0.055, h2(or href) = 25m, v1 (or vref) = 7.689m/s
A farmer’s guide to technology and feasibility
Wind power
System size
Wind conditions may be hard to predict and vary significantly
between times of the day and seasons. Therefore, it is
preferable to size a system conservatively to meet your
permanent minimum load or baseline consumption.
Figure 26: Yield calculator for prospective wind generators
( – The Renewable Energy Website, 2014)
Figure 25: Illustrative demand curve.
Wind Watts vs. Solar Watts:
How Capacity Factor Helps to
Both wind turbines and solar PV installations are
rated by their rated power (in kW). This number
represents the peak amount of power that the
system can generate. However, these systems are
intermittent and can generate less or no power when
there is little sun or wind. “Capacity factor” is a unit of
measurement used to represent the actual power that
is generated. A capacity factor of 100% means that
the generator operated at its rated power 100% of the
time. Capacity factors vary between wind and solar
technologies, and due to location specific attributes
such as solar/wind resource. The average capacity
factor for MW scale wind turbines is around 40%.
However, capacity factors for farm-scale turbines of
less than 100kW in size are usually between 15-20%
(The Carbon Trust, 2008, p. 10). This compares to
15-25% for solar.
You may calculate the expected energy (in kWh) that will be
generated from a wind turbine by multiplying the wind speed
by the number of hours of the year during which that wind
speed is expected9, and then multiply that by the rated output
of the wind turbine at that speed. This will give you the kWh
generated during the year from that particular wind speed
component. You must then repeat the process for other wind
speeds and sum all the components to arrive at the total kWh
expected from the turbine per year. This final total is usually
multiplied by 90% to account for an expected 10% of losses
due to any maintenance and repairs. This calculation exercise
is illustrated by the following equation:
This is simpler to understand and calculate using a
spreadsheet. Alternatively, search for calculators available
online, such as the version below:
Capital expenditure/ongoing costs
Just like solar, wind power has a high up-front cost but a very
low ongoing cost, as the fuel for the system (wind) is free.
Wind turbines do have moving parts and therefore need to be
maintained. Qualified technical experts for wind turbines may
be difficult to find in your area so access to ongoing support
should be given priority in decision making.
Community and council considerations
Despite their relatively small size, farm scale wind turbines will
require local council permission, or other government design
approval. Make sure to consult the appropriate local organisations when considering a wind turbine installation.
More information
Energy Matters – Wind power guide:
AgInnovators – Farm-scale wind power guide: http://
NSW Farmer’s Association has produced a guide to wind
power for host landowners. This guide is available for free
download via the following link: http://www.nswfarmers.
8 Data can be obtained by visiting
and prompting for weather and climate data for a location close to
your farm.
It may be useful to select a measurement station on/near an airport, as
they can be more reliable. Note that accessing data for certain locations
may incur some charges.
9 Expected number of hours per annum can be derived from the Weibull
distribution for that specific mean speed.
Renewable energy in agriculture
Solar hot water
Solar thermal technologies refer to the collection of solar energy for heating (thermal
energy). There are a variety of technologies used to capture this thermal energy
ranging from relatively low cost (solar hot water systems) to high cost (solar dishes
and troughs). In this guide we will focus on solar hot water technology and ground
coupled heat pumps. Solar hot water systems are widely deployed on Australian
farms and can provide all or a large portion of the energy needed for water heating.
How solar hot water works
Solar hot water is a proven, mature technology. It involves the
use of a collector made of materials that absorb heat from the
sun very efficiently. Cold water travels through the collector,
heating the water and returning it to the tank. Hot water floats
to the top of the tank and colder water is taken from the
bottom and returned to the solar collector. To assist with this
circulation, some systems incorporate a small pump that is
activated whenever the temperature difference between the
water in the collectors and that in the tank is sufficient. When
you use hot water, it is taken from the top of the tank where
the water is hottest.
Figure 27 Flat-panel hot water system
(Solahart Australia Pty Ltd).
There are two main types of collectors: flat panels (which at
first glance can be difficult to distinguish from solar PV panels)
and evacuated tubes.
Solar hot water may be sufficient to provide all of the hot water
needed on warm or sunny days, but may fall short on cooler
or overcast days. For this reason, the solar technology often
works in conjunction with an electric or gas “booster,” which
provides additional heat in order to reach and maintain desired
temperature points for stored water. In these instances,
electricity or natural gas required to heat water from pre-solar
heated 25 or 30 degrees is much lower than requirements to
heat water from 10 or 12 degrees (to required temperatures of
65 degrees in NSW). Backup systems can also operate to fill in
when there are extended periods without solar radiation, such
as multiple consecutive rainy days.
Figure 28: Evacuated tube system (APRICUS AUSTRALIA, 2014).
Storage tanks are typically heavily insulated to minimise heat
A key advantage of solar hot water over solar PV is the ability
to store energy. Once converted from solar radiation, thermal
energy (heat) can be stored in liquid form (i.e. oil or water), or
as a gas (in other solar thermal systems).
A farmer’s guide to technology and feasibility
Solar hot water
Flat plate
Evacuated Tube
May be less expensive
Can be less expensive
Operates most efficiently in the
middle of the day
Can heat water to a higher temperature as they have a greater surface area exposed to the
sun at any one time (approximately 40 per cent more efficient).
More sensitive to frost causing
damage to the collectors
Can be used in sub-zero and overcast conditions (can extract heat out of the air on
humid days).
Risk of overheating. As the water reaches its maximum temperature in the tank the
pressure and temperate value automatically activate and release some hot water to allow
for cold water to come back in, reducing the temperature build-up. To minimise the risk,
the number of tubes must match the quality of water to be heated.
Lighter – some lightweight designs can be mounted on walls and even poles.
Uses smaller roof area
Less corrosive than flat systems.
Are durable and broken tubes can be easily and cheaply replaced.
Figure 29: Comparison of flat plate and evacuated tube hot water solar systems (Dairy Australia Ltd., 2013).
Design factors
Solar hot water can be used to reduce the cost of energy
involved in heating water for households. Solar hot water
provides a key energy-efficiency solution for dairy farms and
other operations that frequently need hot water for washing.
Dairy farms require large volumes of very hot water (at around
80 °C) to wash equipment. Preheating water to 60-65 °C
using solar hot water systems and then boosting the water
to the final required temperature (using electricity or gas) is a
great financial option for most dairy farms (Dairy Australia Ltd.,
Before commissioning a solar hot water system consider
some of the following steps and their impact on your budget
and design.
Because of the nature of insulated hot water storage, time of
use for hot water isn’t very important. However, if there is a
need for consistent large quantities of hot water when there is
no solar radiation available (at night), the technology may not
pay off as quickly.
Identify space for mounting solar
The ideal position to maximise solar radiation collection
in Australia is an unshaded, north facing roof. If there is
not sufficient unshaded roof space available to install the
solar collectors, a ground mounted system will need to be
used. Ground mounting a system is more expensive, as the
infrastructure for the panels/tubes needs to be constructed.
Consult with qualified professionals
Solar thermal systems are often sized with ratings to provide
a certain amount of hot water per day. Equipment dealers and
Renewable energy in agriculture
Check assumptions made to
help size your system
Systems often come with ratings based on the number
of bedrooms or occupants within a home. These
ratings are based on residential averages and may not
be applicable when looking at farm buildings, specific
housing arrangements or intensive use of hot water in
dairy farms. Be sure to discuss your individual needs
with the equipment manufacturer or installer to ensure
that you are looking at the right sized system.
professionals should be able to advise you as to which system
will best meet your existing needs.
If possible, tilt for winter
Unlike solar PV panels, solar hot water systems should be
tilted at steeper angles. This is because savings can be
maximised if the system works best during the times of the
year when there is greater demand for hot water, and when it
is hardest to heat water. This happens during winter. Therefore
a steeper pitch on a solar hot water system will optimise its
performance when the sun is lower in winter days. Tilting the
system for winter will also help ensure that the system will not
over boost temperatures during summer creating too high
temperatures and pressures in the system.
System size
To establish required system size:
• Determine volume of total and daily hot water needs
– If the need for hot water is not consistent, determine your
usage patterns and understand how you use hot water.
• Determine when hot water is needed – This is part
of the needs analysis process, but it is important to
understand how water is used. If usage patterns can shift
depending on the availability of solar thermal energy, you
may be able to size your system differently to maximise
return on investment.
• Calculate water storage needs – Water storage is an
important component of the solar thermal system. Without
sufficient storage, you’ll be using the backup electric or
natural gas boost system, and you may not be able to take
advantage of all the benefits of the solar thermal collectors.
Ensure that the system design incorporates enough water
storage so that energy from the solar collectors is being
used for the intended purpose of heating this water. All new
tanks should come well insulated to help maintain optimal
pressure for an extended period so that water does not
cool significantly while sitting in the tank.
More information
AgInnovators – Solar hot water on farm: http://aginnovators.
STCs and solar hot water
Under the current renewable energy target (RET),
eligible solar hot water systems are entitled for small
technology credits (STCs). To find out if the system
is eligible, speak to the system installer for a quote.
Typically, the simplest solution is to have the installer
claim the STCs, and give you the credit as a discount
off the purchase price of the system. This saves the
customer from going through the process of collecting
and selling their available STCs.
A farmer’s guide to technology and feasibility
Solar hot water
Solar hot water system or
Solar PV?
Given recent price drops in the cost of Solar PV (around 60% drop from 2010 to 2013) it is worth
considering a Solar PV powered electric water heater as an alternative to a solar hot water.
Solar hot water systems can transform incident solar energy into heat in water with an efficiency of 4060% (APRICUS AUSTRALIA, 2014). Solar PV systems, on the other hand, are currently at most 20%
efficient at transforming solar energy into useful heat via an electric heater in a tank. This means that for
most farms undergoing a full upgrade of their water heating system a solar-hot water system is the better
However, there are cases where a PV system may be cheaper. For example, if solar PV is being installed
anyway, and a storage tank with an electric heater is already available, then installing additional Solar
PV capacity is possibly cheaper than adding a solar hot water system. This is because the cost of
a new tank (or a tank retrofit) will be avoided and the solar PV system can be used to meet other
energy requirements. The savings from this option can be further maximised by installing devices that
automatically turn on an electric water heater when there is excess solar generation available
Remember that each case will require an individual assessment of the site and its requirements to
determine the most appropriate system. Upgrading the whole system at one time minimises installation
costs and can ensure that all components are warranted to work together over a longer period.
Renewable energy in agriculture
Bioenergy is a form of renewable energy derived from vegetable and animal derived
organic materials, for example bagasse, oil seeds, manure and animal fats.
Bioenergy is a complex field, involving many different
technologies to produce different forms of energy. The main
technologies feasible at farm scale are:
• Combustion technologies that convert solid biomass
through direct burning to release energy in the form of
heat which can be used to generate electricity and
process steam.
• Biogas technologies that produce methane by anaerobic
digestion of animal and crop waste.
• Biofuel technologies that produce ethanol and biodiesel
using chemical conversion processes
Advantages of bioenergy solutions may include:
• the ability to store feedstock in bulk for conversion to energy
when needed
• the reduction or removal of waste disposal costs
• cost-effective management of smell, pests and other
environmental impacts of waste.
• an alternative use for crops (allocating crops to energy when
food commodity prices are less favourable).
Waste to energy
Every farm produces organic by products that potentially can
be recycled into energy.
Key challenges facing organic waste to energy projects in
other sectors are variability in volume and quality of crop and
animal based waste, costs of aggregating waste and the large
capital investment typically required for processing plants.
Australia’s sugar industry has used bagasse, the fibrous
residue left over after extraction of cane juice, to meet its
electricity and heat requirements for over 100 years, and in
recent years has supplied ethanol refineries with feedstock.
Bagasse is economical as an energy source, however,
because the sugar industry is structured on a cooperative
basis and shares aggregation and processing infrastructure
for the waste material.
The greater cobenefits of recycling animal waste to compared
to plant waste tends to make animal bioenergy projects more
prospective than crop waste projects. The past decade has
seen successful methane capture projects in piggeries (NSW
Farmers, 2014) and dairies (Dairy Australia Ltd., 2013) and
there is growing interest in the potential of chicken waste as an
energy source (McGahan, Barker, Poad, & Wiedemann, 2013).
Complex financial and sustainability questions may arise, also,
around the allocation of waste to energy. For example: chicken
waste may fetch a better price as manure in some years than
as an energy feed stock; crop or agroforestry waste may
be better returned as biomass to soil rather than burned for
The challenges facing waste to energy projects are steadily
being overcome by significant collaborative research
programs, including Rural Industry Research and Development
Corporation (RIRDC) and Dairy Australia research on biomass
and biogas, and CSIRO and NSW Department of Primary
Industry research into biochar.
A farmer’s guide to technology and feasibility
Figure 30: Feedstock most suitable for the different conversion processes (Energetics, 2014)
Areas for future development and demonstration include
collaborative models where intensive producers share the
capital costs of processing plants and aggregation of waste,
and commit to supply the volumes of waste needed to achieve
return on capital.
Precinct models are the most prospective in this regard. For
example, poultry farmers could co-locate sheds around waste
to energy infrastructure, reducing both aggregation costs and
the costs of distributing the resulting energy within the precinct.
The aim of such models would be for farmers to collectively
generate all the energy needed to run their operations.
Biofuel is the general term for liquid fuel products derived from
organic sources. The two most common types of biofuel are
bioethanol, which replaces traditional petrol or gasoline, and
bio-diesel which replaces traditional diesel fuel. In addition,
there is increasing demand for sophisticated aviation biofuels,
with both Qantas and Virgin airlines undertaking research into
the feasibility of feedstock and biorefinery projects. Biofuels
can be produced both from organic waste and from crops
produced specifically for fuel or energy production. The
specifications and chemistry of biofuel products can be exactly
the same or better that fossil fuel derived fuels. The challenge
in commercialising the biofuel industry is the relatively high cost
of production.
A wide variety of fats and oils can be used for biodiesel
including soy, canola and waste cooking oil. Presently,
however, the majority of Australia’s biodiesel is produced from
recycled cooking oil.
Australia’s total annual biodiesel production appears have
stalled at 175 ML sourced from relatively small commercial
recycling plants. For example, Biodiesel Industries Australia,
in Maitland, recycles used vegetable oil and produces 9ML per
annum ( Geoscience Australia and BREE, 2014).
Present national production is much lower than installed
capacity which the Biofuels Association of Australia reported
to be 500 ML in 2012.
Farm scale biodiesel
While technology is available for farmers to implement biodiesel
plants on their properties or as local cooperatives there is
currently no compelling economic case for such investment.
Sharp increases in diesel prices in the period 2001 to 2005
from less than $1 per litre to close to $1.40 created interest
in small farm-scale biodiesel plants. This interest waned,
however, partly because petroleum prices did not climb as
sharply as anticipated but also because farmers discovered
the effort and cost of growing fuel crops10 and processing the
bio diesel did not warrant the return.
In addition to the capital and operating costs of biofuel
technology farmers must consider the relative cost of
petroleum diesel and the opportunity cost of crops used as
feed stock, both of which vary from season to season. Lower
canola prices and sustained increases in petroleum diesel
Renewable energy in agriculture
prices may stimulate renewed interest in the technology. The
generation of biofuel from algae may ultimately provide new
pathways to diesel self sufficiency with research projects
providing encouraging outcomes. Costs of production are still
too high to be commercial, however. (NAABB, 2014)
Examples of waste to energy
• Animal effluent fed into aerobic digester producing
• Chicken waste as feedstock for a pyrolysis plant
creating both electricity and biochar (for use as soil
• Woody weeds, straw or other cellulosic refuse
directly burned or put through pyrolysis to create
electricity and biochar
How waste to energy works
There are four main types of conversion processes associated
with energy from biomass11: Anaerobic digestion, pyrolysis,
gasification and direct combustion.
Anaerobic digestion (AD)
Anaerobic digestion (AD) is the microbial conversion of biomass
into a methane rich gas (biogas) in the absence of oxygen. The
fuel gas can then be used for power generation using a gas engine, heating (e.g. combustion in a gas-fired boiler) or chemical
transformation (i.e. use biogas as raw material for chemical processes). Processes that treat low solid content wastes (usually
<15% dry solids composition) are commonly known as ‘Wet
AD’; and those that are designed to treat higher solid content
waste (usually 15-40% dry solids) are referred to as ‘Dry AD’.
Pyrolysis is the thermal degradation of biomass to produce
bio-oil, syngas and charcoal at medium temperatures (350–
800°C) in the absence of oxygen. The ratio of char-to-liquid-togas is affected by the speed and temperature of the pyrolysis
reaction. Slow pyrolysis favours the production of bio-char,
while fast pyrolysis maximises the production of bio-oil.
Biochar is a solid form of biomass and is a material similar to
coal or charcoal. It can be used as an amendment to help increase soil fertility or for other uses, including direct combustion.
In Australia, the majority of bioethanol is produced
by commercial refineries of which there are three, all
located on the east coast. The largest of these is the
Manildra Group refinery in Nowra NSW which has an
annual production capacity of 180 ML ( Geoscience
Australia and BREE, 2014). These refineries meet
demand for mandated ethanol for inclusion in e10
petrol. Currently, the feed stock for these refineries
comes largely from the sugar industry.
Gasification is a similar process to pyrolysis with minimal or
no oxygen at a medium to high temperature but focused on
the production of the gaseous products rather than the char
output. The resultant gas, often called syngas, is largely made
up of carbon monoxide, hydrogen and carbon dioxide but with
a variety of tars and other contaminants which may need to be
removed depending on application.
Utilising biogas involves the controlled collection of gases
released during the decomposition of organic matter to use for
burning, which runs an engine, powers a turbine, or directly
creates heat.
Biogas processing and collection can happen on a small or
large scale, and is accompanied by varying degrees of sys-
10 Few farms produce high volume waste streams that are suitable for biodiesel production
11 Biomass energy refers to any energy derived from an organic waste source. This includes any sort of material including woody weeds, animal effluent,
crop by-products or grasses grown for the express purpose of fuel utilisation.
A farmer’s guide to technology and feasibility
tematic control. Methods include covering a pond of animal
effluent and collecting methane as it naturally separates from
the solids left in the pond. This method also works with other
types of organic material, such as crop residues, or human
trash within a landfill. Large scale “digesters” can also be used.
These digesters are more common in urban settings, where
there are high levels of human waste or other organic material
and where management of odour is a priority.
Design Considerations
Direct combustion
• Value of the feedstock (if purchased from off farm,
or if sold instead of used for energy)
Direct combustion refers to the direct firing or co-firing of biomass in a boiler to produce steam and heat. Due to the large
capital expenditure associated with these type of projects,
large volumes of low cost biomass waste are typically required.
Advanced versions use pyrolysis or gasification to improve
efficiency. NSW examples include gasification of rice hulls and
combustion of macadamia nut shells.
• Cost of aggregation
All organic material has stored energy. The amount of energy
stored in these materials varies greatly, and the output of the
organic fuel source will vary accordingly. Figure 30 shows the
energy density of different biomass materials compared to coal.
Biomass material
Canola seeds
Wheat straw
Soybean hulls
Pig manure
Poultry litter
Figure 31: Indicative energy density of common biomass sources
compared to coal
The design of a bioenergy solution requires significant expert
input at selection stage and then in relation to subsequent
design and installation.
• Feasibility studies are essential that addresses
• Alternative uses of feedstock (what is the best and
most sustainable use of the feedstock)
• Feedstock chemistry and consistency (this is critical
to system performance)
• Capital and operational costs of the plant itself
• Co-benefits (for example, reducing waste disposal costs)
As noted above, a primary consideration is locking in a sufficiently consistent supply of feedstock to warrant investment
in the technology. Related to this is deciding whether energy
generation is in fact the most sustainable or profitable end use
of the biomass. In many cases, grain waste and other agricultural by-products are better returned to the soil to help retain
moisture or other vital soil components like phosphorus or
nitrogen. Likewise, allocating land and water to production of
energy crops raises complex sustainability questions at a local
and global level.
More information
• Conversion of Waste to Energy in the Chicken Meat Industry:
• Dairy Shed Effluent and Biogas –
Frequently Asked Questions
• Piggery case study
• Poultry Case Study
Figure 32: An anaerobic biodigestion facility installed on the
Beveridge piggery near Young, NSW.
Farms that produce animal effluent with high methane content
such as piggeries and dairies should give serious consideration to capturing methane for conversion to electricity. Poultry
farms also generate waste that has significant energy content.
Various technologies may be viable in this case including biodigestion and pyrolysis.
Renewable energy in agriculture
Ground source
heat pumps
Ground source temperature regulation solutions for agricultural facilities are relatively
new in Australia but are well established in the Northern Hemisphere.
Ground source heat pumps (GSHPs) can be highly effective as
source of night time heat in combination with Solar PV during
the day: For example, to eliminate the need for LPG in heating
animal production facilities.
Heat exchange technology is commonplace in today’s world.
Examples of heat exchangers are traditional air conditioning
systems which use air as their temperature source (these are
known as air-source heat pumps or ‘ASHPs’). The technology
is similar when applied to (GSHPs) but, as their name implies,
the main difference between a GSHP and an ASHP is their
source of a temperature differential.
By using stable ground temperatures at a depth of just a
few metres, GSHPs avoid the large temperature swings
that reduce the efficiency of traditional systems, while also
minimising exposure to outdoor ‘pollutants’ such as salt, dust,
pollen, etc. GSHPs can provide high efficiency heating and
cooling to farm houses and buildings. Essentially, anything that
requires heating, cooling or hot water can benefit from a GSHP.
Not to be confused with other
types of geothermal energy
GSHPs are often referred to as geothermal heat
pumps or ground coupled heat pumps. The term
GSHP is typically used in Australia and elsewhere to
avoid confusion with ‘geothermal’ power plants that
generate electricity from ‘hot rocks’ or other unique
geological features.
The name ground source heat exchange can be
confusing, as this technology is used to provide
cooling as well as heating.
GSHPs are a well established technology
internationally and are common in many parts of North
America and Northern Europe. However, despite the
first local installations occurring in the early 1990s,
they are not yet widely adopted in Australia.
A farmer’s guide to technology and feasibility
Ground source heat pump
Figure 33: Example of a horizontal closed loop Ground source heat pump and heat exchanger (GeoExchange, 2014)
Figure 34: Different system setups of ground heat exchangers. Horizontal closed loop (top left), vertical closed loop (top right), open loop
with water pumped through bores (bottom left), closed loop system in water reservoir (bottom right). (GeoExchange, 2014)
How it works
Across Australia, ground temperatures are a function of
average ambient air temperature and range from 10-12C in
the colder south to 32-34C in the tropical north. The main
population areas from Perth across to Melbourne and north to
Brisbane range from 16-22C.
In a similar way that a traditional air source heat pump (ASHP)
exchanges heat with the outdoor air, a GSHP exchanges heat
with the ground. As pumping rock and soil through a heat
pump is not a very sensible option, a GSHP attaches itself
to the ground via a network of pipes called a Ground Heat
Exchanger (GHX).
The GHX can be thought of as an onsite thermal battery. It
provides both heating and cooling capacity and enables a
dwelling to store the heat rejected from it during summer so
that a portion of it can be recovered and used to heat that
same building in winter.
The GHX can be either vertical or horizontal and in some cases
can use a water body such as a farm dam or a harbour. The
system can even use groundwater pumped by a bore in what
is called an ‘open loop.’
The slow transfer of energy (both into and out of the ground)
means that ground temperatures remain relatively constant
regardless of air temperatures during any particular season.
Ground source heat pumps take advantage of this consistent
thermal mass to make heating or cooling more efficient, and
can provide all or a portion of the required conditioning needed
for a designated space. Although a GSHP system does not
require a backup system to provide a buildings heating and
cooling needs, sometimes a hybrid system is installed which
may integrate the GSHP with more conventional heat sources
or heat rejection systems.
The most common systems are either “open” or “closed
loop,” and are a series of connected polyethylene (PE) pipes
with fluid that runs through an underground trench or in a
borehole. Systems can either be horizontal, with pipes running
horizontally through trenches, generally one to two metres
below the surface, or vertical, where boreholes are drilled up
to 100 metres deep.
Horizontal systems are typically less expensive as they don’t
require drilling equipment. Vertical systems may cost more to
install but require a smaller land footprint. The type and depth
of ground is important when assessing suitability for a Ground
source heat system, as it can be difficult to dig horizontal
systems without sufficient soil depth.
Heat pump efficiency is measured in “Coefficient of
performance,” (COP) which is a metric that defines the amount
of energy used to generate or transfer a unit of heat. COP
ratings on heat pumps are defined at a particular temperature,
Renewable energy in agriculture
Figure 35: Example horizontal ground heat exchanger being installed in a pit (before filling in) (GeoExchange, 2014)
and this efficiency declines as temperatures become more
extreme – ie, colder temperatures that need to be heated or
hotter temperatures that need to be cooled.
Ground source heating is ideal for farm houses and other
buildings that need to be heated or cooled. This includes
poultry sheds, greenhouses that require temperature
regulation, and other cool storage areas. These systems are
especially attractive when constructing a new building, as
system design can be incorporated into the general design
process. However, retrofit is possible and in some instances,
existing equipment may be incorporated into a final ‘hybrid’
Heat pumps use electricity to run the heat exchange process,
and can be installed in conjunction with other forms of
renewable energy, such as solar PV or wind.
While these systems use electricity, they are much more
efficient than conventional electrical heating or air conditioning
units. The key to this is the use of those constant ground
temperatures discussed earlier, rather than being reliant on
outdoor air temperatures that can range from -10 to 50C
depending on location, direct sunlight and wind chill.
Much in the same way that solar thermal uses latent solar
radiation to “pre-heat” a fluid, in Ground source heating, the
latent heat in the ground is used to “pre-heat” a fluid, getting
it closer to the optimal temperature to run a heating or cooling
system. The GSHP is then used to provide temperature set
points. In heating mode, the ‘passive’ element of circulating
water through the GHX typically provides 70-80percent of the
heat delivered into the building. The GSHP is the mechanical or
active element of the heating cycle and will provide the balance
as required by a thermostat or building control system. By
providing up to 80% of heating requirements through passive
water circulation, this process uses significantly less energy
than a conventional system.
Design considerations
Ground source heat pumps will be used primarily for heating
or air conditioning. The following steps are important to ensure
that you are installing the proper sized system:
• Is GSHP the right system?: Because of the higher
up-front cost of a Ground source heating system, the
technology makes the most financial sense the more often it
is used. For example, if the space only needs to be heated
or cooled for a few weeks each year, it may not be the most
cost effective solution. A primary residence in an area with
variable temperatures, or a space that needs to maintain
consistent temperatures throughout all seasons are best
suited for this technology.
• Determine heating and cooling loads for the building:
There are a number of software heat load modelling
programs that you can use to determine the proper sized
system, but these can be difficult to navigate if you don’t
have much experience with HVAC systems. Make sure
that the dealer/manufacturer is using a method for sizing
your system, as opposed to simply giving you whatever
is available. It may make sense to shop around, compare
quotes, and have multiple sources examine your
proposed system.
A farmer’s guide to technology and feasibility
• Select and calculate the Ground Heat Exchanger:
Selection of an appropriate GHX is key and is dependent
on soil type, geology, available land area and land uses. The
presence of water bodies such as dams and even aquifers
should also be taken into consideration. It is usually a fairly
simple selection for any given site. The GHX calculation
requires experienced industry professionals and industry
specific software that considers all elements of system
design from the building loads to the ground conditions,
local climate and the GSHPs to be installed.
Ground source heat pump
Benefits of GSHP
• Reduce electrical use and costs by up to 60%;
• Reduce LPG costs by up to 80 %;
• Reduce peak electrical requirements (eg cooling
during heat waves or heating during cold snaps) by
up to 40%;
• Reduced maintenance and long system life;
More information and
• The combination of onsite renewable power and
GSHPs future proofs buildings against future energy
increases in both electricity and gas;
• Removal of LPG improves air quality in production
• Removal of LPG removes reliance on the gas
provider for regular deliveries;
• Heat transfer possible between separate buildings
on the same site, especially where they may have
slightly different heating/cooling requirements.
Renewable energy in agriculture
Capital expenditure/ongoing costs
In general, renewable energy generation
technologies have a high up-front
cost, but very low ongoing operating
costs. Technologies like wind, solar,
Ground source heating/cooling all use
free energy inputs to generate power.
Waste to energy systems require a more
complex planning and delivery process
for inputs, but these inputs are often
readily available on site, and cost little
to nothing to produce.
The Renewable Energy Target (RET)
and Small Technology Credits (STCs)
The federal Renewable Energy Target (RET) refers to
the legislative framework to incentivise the production
of renewable energy in Australia. It does so by requiring
energy companies and other entities to acquire and
periodically surrender a number of Renewable Energy
Certificates (RECs). This requirement means that RECs
have a market value and can be sold and/or traded.
Each RECs represents 1 MWh of renewable energy
generated. There are two types of RECs:
‘Small-scale Technology Certificates’ (STCs), and
‘Large-scale Generation Certificates’ (LGCs)
As of the writing of this guide, renewable energy
generators such as solar PV systems of less than 100
kW, wind turbines under 10 kW and solar hot water
systems were eligible to generate STCs as part of the
RET12. These can be claimed upon the installation of the
system and typically deemed for the expected energy
that the system will generate in the next 15 years.
It is common and sound for customers to sign over
the STCs generated from their new renewable energy
system over to the business who conducted the
installation. This allows the installer to offer a discounted
price for the system and cover this shortfall by selling
A farmer’s guide to technology and feasibility
Financial Assessment
Feed in tariff
(cents per kWh, excluding GST)
Net/Gross Metered
Diamond Energy
Lumo Energy
Energy Australia
ERM Business Energy
Commander Power & Gas
Momentum Energy
Table 2: Feed in tariffs available to small business customers in NSW (Australian Energy Regulator, 2015)
NSW Solar Bonus Scheme
In January 2010, the NSW Solar Bonus Scheme was introduced; it entailed a 60c gross feed-in-tariff. This meant
that customers under the scheme would receive 60 cents for every kWh of energy generated by an eligible system.
This resulted in a tremendous uptake in solar PV.
The solar bonus scheme was reduced to 20c per kWh on 27 October 2010 (for new applicants) and was subsequently
closed to new entrants on 1 July 2011. It will be completely phased out by December 31 2016.
Table 3: Number of Systems Connected/Applied for Connection in NSW during Open Applications Term of the Solar Bonus Scheme
(New South Wales Auditor-General, 2011)
Renewable energy in agriculture
Net vs Gross Feed-in-tariffs
Net feed in tariff
Gross feed in tariff
A net feed-in tariff pays you only for the surplus energy
that you feed back into the grid. This type of scheme
operates virtually everywhere in Australia now. The
power that is not exported to the grid is used by the
home, thereby reducing the electricity of the home or
business in question through avoided purchase
of power from the grid in the first place.
A gross feed in tariff pays you for every kilowatt hour
of electricity your solar cells produce, regardless of how
much energy you consume. Generally speaking, gross
feed-in tariffs are not offered through electricity retailers
these days. The vast majority of feed-in arrangements
are net feed-in arrangements.
the generated STCs. Customers can check whether the
level of discount offered is in line with the revenue that
will be generated by the forfeited certificates.
This can be done by estimating the expected energy (in
MWh) that the system will generate over 15 years and
multiplying this figure by current prices of STCs. These
can be accessed online through websites
such as:
Feed in Tariffs
Feed in tariffs are payments for energy supplied by
renewable energy generators such as solar PV and wind
Historically, state and federal governments in Australia
have employed various levels of reward for renewable
energy generated by small private parties (see ‘NSW
Solar Bonus Scheme’). In many cases this meant that it
was preferable to install systems to generate and export
as much energy as possible.
In November 2014, the weighted average price of
commercial PV system across capital cities in Australia
was approximately $1.46/W (Solar Choice, 2014).
Discounts offered via forfeiture of STCs for these
systems amounted to approximately $0.65/W on the
system price. This means the RET permitted discounting
to a level of about 31% off the sticker price.
However, government policy changes and reduction in
overall electricity demand have meant that most feedin-tariff schemes have been reduced, or are no longer
available to new system owners. As of February 2015,
most states have no government mandated regulation to
ensure feed in tariffs are offered for generated renewable
power. This has switched the financial game around, as
it is now best to size a system to maximise the amount
of energy from it that is self-consumed (resulting in
savings of power since electricity does not have to be
bought from the grid).
The process of selling or trading certificates is complex
and involves risk and is therefore best left for agents (like
solar installers) who have aggregated large numbers
of certificates and are familiar with the market and
Nonetheless, even though it is not required by regulation,
most electricity retailers wish to remain competitive and
therefore continue to offer some level of feed-in tariffs. It
is important to shop around for a good retailer that will
reward generated power appropriately.
A farmer’s guide to technology and feasibility
Financing options for renewable
energy systems
Because of the high initial cost of renewable energy,
finding the money to fund the investment may require
external capital. The usual avenues for investment (your
local bank or the equipment installer) will usually offer
financing options, and it is important to shop around, as
interest rates for financing can add significantly to the
lifetime cost of your project.
Documentation and evidence of project payback is
often useful and sometimes required in securing project
financing. Some lending institutions offer specific “cleanenergy” finance packages at lower rates.
Speak with a lending professional to understand the
requirements for obtaining a loan for a renewable energy
The NSW Office of Environment and Heritage has
published an “Energy Efficiency and Renewables
Finance Guide,”13 which provides extensive detail on
the main financing options available for renewable and
energy efficiency projects. These are:
Bank Loans
• Self funded
• Commercial loan
• Energy efficiency loan
Lease Agreements
• Operating lease
• Capital lease
• Environmental upgrade agreements (EUA)
• Utility on-bill financing
• Energy services agreement (ESA)
• Purchasing power agreement (PPA)
A description, and the advantages and disadvantages of
these financing methods are introduced in Table 4:
Financial Assessment
Power purchasing agreements (PPA)
Power purchasing agreements (PPAs, sometimes referred to
as ‘solar leases’) are a recent development in Australia but
have been highly successful in the US and Europe. These
arrangements are similar to a lease agreement, in that a
company will install a solar system on the customer’s property
(typically at little or no up-front cost to the customer) but retain
ownership of the system. The customer will then agree to buy
the power generated by the system for a contracted rate. This
rate is lower than typical retail rates and therefore, provides
immediate savings to the customer’s electricity bills. The
contractual length of these agreements is 20 years or more
and an option to purchase the system before or at the end of
the term is typically part of the contract. It is easier to think of
a PPA as an agreement to buy power from a renewable source
than an agreement to have a solar system installed (Solar
Choice, 2013).
PPAs can offer several advantages over other financing
options. For example, energy savings are incurred immediately
and the duty and costs involved in maintaining and ensuring
operation of the system is kept with a third party and not the
consumer. However, PPAs can be hard to obtain for smaller
installations and can entail arrangements which limit the
flexibility and utility of the system for the customer.
More information on solar PPAs and their suitability for
particular cases is available here: http://www.solarchoice.
Financial appraisal methods to
compare solutions and offers
We recommend that all farmers analyse financial suitability
before commissioning renewable technology on their farm.
There are three key appraisal methods that help convey and
compare the financial effectiveness of an investment on a
system. These are:
• Simple Payback method
• Internal Rate of Return
• Net Present Value
Renewable energy in agriculture
Self funded
Energy efficiency or
renewables project is
financed with own funds from
capital budget
No external obligations to
Business owns and can
depreciate the equipment
Must meet the company’s
minimum acceptable rate
of return on capital (also
referred to as the project
hurdle rate)
Less capital available for
investment in core business
Business carries all finance
and performance risks
A lender provides capital
to a borrower, to be repaid
by a certain date, typically
at a predetermined interest
rate that moves in line with
changes in a reference
lending rate
Customer makes regular
repayments to lender to
cover interest costs. Capital
repayments can be bundled
with interest payments, or can
occur at the end of the loan
No or reduced up-front cost.
Interest and depreciation of
energy efficient equipment
are tax deductable.
Capital lease
A loan available only for
energy efficiency and
renewables projects
The equipment is owned
by the financier and the
customer obtains the sole
right to use it.
The customer pays regular
lease payments to financier
and pays all maintenance
At the end of the lease, the
customer has the option of
returning the equipment,
making an offer to buy it, or
continuing to lease it
Same as operating lease,
except that at the end of the
lease, equipment ownership
transfers to the customer
on payment of an agreed
Customer could be required
to provide security, such as
a lien on property or other
assets, or guarantees from
parent companies, another
financier or owners
Loan is on the balance sheet
No or reduced up-front cost.
efficiency loan
Customer bears the
economic and technical risk
if the equipment becomes
Interest and depreciation
of new equipment is tax
deductable In addition,
these loans are specifically
designed for energy
efficiency and renewable
energy projects, so generally
have lower interest rates and
longer finance periods
Customer bears the
economic and technical risk
if the equipment becomes
Customer could be required
to provide security, such as
a lien on property or other
assets, or guarantees from
parent companies, another
financier or owners
Loan is on the balance sheet
Few financiers offer this type
of loan product
No or reduced up-front cost.
Limited collateral required
(other than the asset)
Leasing costs are tax
Fixed lease payments
Lease obligation is off –
balance sheet
Financier bears ‘residual
value risk’ (i.e. risk that the
equipment has no value
at the end of the lease).
Particularly suitable where
equipment has perceived
high obsolescence or is
required for a short period
Customer bears the risk of
the equipment becoming
unusable during the lease
Customer cannot depreciate
the asset
More suitable for capital
intensive projects and where
costs are mainly for physical
Less suitable for less
expensive equipment, such
as lighting, or when a large
portion of costs are for
installation and associated
Less suitable when
equipment is difficult to
remove or reuse
No or reduced up-front cost
Fixed lease payments
Customer depreciates the
Interest component
of repayments are tax
The lease obligation appears
on the balance sheet
Customer bears the
economic risk of the
equipment becoming
unusable, including the
‘residual risk’
As for operating lease, more
suitable for capital intensive
projects and where costs are
predominantly for physical assets
A farmer’s guide to technology and feasibility
Utility on-bill
Energy services
Financial Assessment
A loan for the environmental
upgrade of a building
which is repaid through a
local council environmental
upgrade charge
No or reduced up-front cost
Loan tied to the property
leads to lower risk for the
financier, so better rates
and extended terms are
Lower risk for financier, so
better rates and extended
terms offered Interest
component of payments are
tax deductible
Fixed EUA repayments
Provides a mechanism for
transparent pass-through of
repayments to tenants
Energy retailer installs
equipment. This is repaid
through a ‘repayment’
charge on energy bills.
Once all payments
are made, title for the
equipment transfers to the
An ESA provider designs,
constructs, owns and
operates equipment.
Customer pays fees to
cover operation and
maintenance costs,
including energy costs,
and to repay capital and
implementation cost. The
fees are indexed to CPI,
labour rates, and to the
price of energy. Customer
can typically purchase
equipment at end of ESA.
An ESA provides the endto-end delivery of energy
efficiency and renewable
energy projects. Finance
can be arranged using
any of the finance options
above, or can be provided
by the ESA provider
At present only available for
commercial and industrial
buildings in limited council
areas: City of Sydney,
North Sydney, Parramatta,
Newcastle, Lake Macquarie,
and City of Melbourne
Perceived to be complex
Consequently, deals below
$250,000 are not preferable
for some financiers.
The loan can be considered
on the balance sheet,
subject to the specific
circumstances of a
No or reduced up-front cost
Interest component
of repayments are tax
Payment via utility bill
reduces risk of default,
therefore lowering financing
Typically have guaranteed
Typically arranged through
a provider who can identify
and implement energy
saving opportunities
Generally ties customer to
the energy retailer for the
financing term, regardless
of whether the retailer offers
competitive energy rates
No or reduced up-front cost
Can be higher cost than
using other finance options
in isolation, due to transfer
of risks to an ESA provider
An ESA is off balance sheet
Payments are tax
deductible (operating
Implementation and
operating risks are
transferred to the ESA
The ESA provider is
incentivised to maximise
energy savings; they
guarantee savings or the
customer only pays for the
output of the equipment
Risk of energy being cut if
customer defaults on the
debt repayment
If energy savings are not
guaranteed, customer bears
technical risks
Repayment liability is on
the balance sheet
ESA suppliers will generally
not undertake projects that
do not require significant
on-going maintenance
The ESA market in Australia
is at an early stage of
maturity; it is a limited
source of financing for nongovernmental organisations
ESAs are typically only
available for large projects
Table 4: Advantages and disadvantages of energy efficiency and renewables finance options (OEH; Energetics, 2014)
Renewable energy in agriculture
SPB – Simple Payback
For an investment that generates revenue or savings, the
simple payback rate equates to the number of years (or
months) that it will take to recoup the original investment
amount. The simple payback method generally makes no
adjustment to discount the value of money/capital in the future
or additional financial inputs like inflation or escalating energy
costs. It is merely calculated as follows:
This can also be expressed in equation form as follows:
is the total number of years pertinent to the investment
is any given year
is the cash flow (savings or cost) during the year
A 10kW solar PV system cost $15,000 AUD to fully install and
will enable yearly savings of $4,000 AUD. The simple payback
rate for this system is:
SPB is used profusely to market renewable energy systems
and has the advantage of being easy to calculate. However, it
has many disadvantages including, among others:
• Lacking account of discounting of future cash flows,
• Inability to differentiate between projects with similar payback
rates but dissimilar returns
• Future savings (after payback is met) are not quantified or
is the discount rate
This calculation can also be automatically calculated using a
spreadsheet program like Microsoft Excel and its inbuilt NPV
Net Present Value is considered a strong appraisal metric as
it takes into account the time value of money, as well as the
lifetime and scale of an investment. Consider, for example,
two project opportunities with the following outcomes
Project 1
Project 1
Required initial outlay
Lifetime of investment
5 years
10 years
Savings generated per year
On paper it seems that Project 1 is a better option, and
appraising this project using simple payback method would
support this:
NPV – Net Present Value
Another way of appraising the financial value of a renewable
energy generation project is by inspecting its Net Present
Value. This value represents the sum of all outflows (costs) and
inflows (savings and revenue) from an investment in a figure
that takes into account the time value of money, that is: the
concept that money in the future is ‘discounted’ (worth less)
than an equal amount of money today.
Discounting is due to a variety of factors that can be pertinent
to a given investor such as inflation, or the interest that is
forfeited by not placing the principal sum in a competing
investment. The equation that derives the Net Present Value
of an investment is given by summing the discounted value of
each yearly cash flow. For instance, for our previous example
of a $15,000 solar PV system, assuming a discount rate of
7%, a life of the system of 20 years, and constant savings of
$4,000 per year, we have:
Simple payback rate
Project 1
Project 1
1.6 years
3.75 years
However, even though the second project requires a larger
outlay it has a better NPV outcome if the discount rate is less
than 8%.
NPV after 10 years
(7% discount rate)
Project 1
Project 1
This indicates that over the length of the investments, the
second project has a higher net value to invest into today. This,
of course, is a manufactured example, but it showcases the
utility of the NPV method for financial appraisal.
IRR – Internal Rate of Return
NPV= $27,376.06
The internal rate of return (IRR) is the discount rate that
makes the Net Present Value of an investment equal to zero.
This value is useful to compare against alternative investments
or the cost of borrowing. For example, an internal rate of return
of 6% is insufficient if borrowing costs are 8%.
Financial Assessment
A farmer’s guide to technology and feasibility
Calculating internal rate of return is done iteratively by trial and
error. Using the NPV formula as before:
One must repeat the calculation (preferably with the help of a
spreadsheet)15 until the selected discount rate ( r ), makes the final
net present value equal to zero. For our examples below these are:
Internal rate of return (IRR)
Preparing quotations and
evaluating suppliers
The marketplace for on-farm energy generation technologies
is constantly evolving and changing. Currently, there are many
local and regional solar PV installers, but fewer companies able
to design and install other types of technology (like waste to
energy or Ground source heating).
Project 1
Project 1
As with any major investment, it is recommended that you
research the technology, understand the market, and compare
quotes from potential installers.
Solar Installers
Using the IRR is beneficial in comparing your energy
generation investment against a more traditional financial
investment opportunity, as it gives a comparable figure to a
bank savings account, stock or bond. However, IRR doesn’t
generally calculate risk factors, labour costs, or the reliability of
the technology.
Understanding of future needs
(expansion, etc)
A major component of energy planning and assessing the
viability of on farm energy technologies revolves around future
planning for the farm. When possible, plans for expansion or
contraction of the existing business model should be factored
into the equation when considering energy investments.
There are certain certifications and indicators that may help
to assess whether a solar PV installer and their products are
reputable. These include:
• Solar panels have a good warranty (industry standard is
80% of nominal power after 20 years)
• Inverter has a good warranty – preferred industry standard
is 10 years
• Installation warranty (5 to 10 years)
• Products are Tier 1 or Tier 2.
• The installer and their products are accredited by the Clean
Energy Council (CEC)
• The products have a presence in Australia
Incorporating renewable design
New infrastructure often provides a perfect opportunity
to incorporate on-site energy generation into the existing
farming operation, and may reduce overall costs, or increase
technology efficacy. For example, if a farm is planning to add
sheds, the shed roof orientation and slope can be designed
with the intention of including a solar thermal or solar PV
system. This will provide an optimal location and orientation for
the solar collectors. Other options, like ground source heating
systems are much more cost effective when constructed along
with a new structure, as costs for a conventional HVAC system
can be avoided. Drilling and planning loop fields is also more
practical during an existing foundation construction process.
• The installer is experienced and reputable
While these criteria do not necessarily guarantee the quality
of the installation, they are a basic step that you should look for
as a potential customer.
Another example is the use of Solar PV in new shading
structures such as those for cattle at feedlots (see figure below)
12 The RET legislation is currently under review, and the change or
elimination of the RET could result in a change to, or elimination of,
these STCs. We recommend that you conduct your own investigation
and speak to installers about the incentives that are currently available
to help fund these types of projects.
13 Available online here:
Figure 36: Example design of an integrated photovoltaics for
a beef feedlot in Missouri. The system generates power but
also serves to provide shade (Scotts Contracting; St Louis
Renewable Energy, 2014)
14 Be aware that Excel’s NPV function incorrectly discounts the first cash
flow (at year 0) so some steps are needed to correct the outcome
15 IRR can also be calculated using the inbuilt ‘IRR’ function available
in Excel.
Renewable energy in agriculture
Farm energy
As mentioned in the overview, we
recommend that you address on farm
energy management and efficiency
before investing significant capital in
renewable energy.
You will find it difficult to select the best technology and
calculate return on investment accurately if you don’t
first minimise energy wastage and establish the true
energy baseline of your property.
Farm energy planning should not be seen as a complex
or daunting process. NSW Farmers has developed
a suite of tools and information materials to help
producers better understand the process of farm
energy planning and achieving energy efficiency gains.
These may be accessed at:
In addition, professional energy assessors and planners
can visit your property and provide advice for a modest
The key steps in implementing an effective farm energy
plan are:
Step 1 – Conduct an energy audit to establish baselines
and patterns of use
Step 2 – Improve energy purchasing (i.e. negotiate
better rates or shift equipment to off-peak times)
Step 3 – Implement conservation strategies (e.g. reduce
idling, ensure power is off when not required) and,
where possible, identify and invest in energy efficiency
Step 4 – With consideration to the updated energy
baseline and costs (after efficiency and lowering of rates
strategies have been implemented), investigate on-farm
sources of renewable energy
Following these steps will help determine the right
system size for a renewable energy generator. Any
cost-of-power reductions, ‘quick-win’ opportunities and/
A farmer’s guide to technology and feasibility
or energy efficiency investments that are implemented
before step four should be taken into account. This
is critically important when considering investment in
electricity generation as current tariff frameworks in
Australia can make it counterproductive to invest in farm
generation capacity in excess of actual needs, or out of
step with use patterns.
Step 1: Establish farm energy baseline
There are several levels of detail and accuracy involved
in energy analysis. As a rule of thumb, the larger the
energy bill, the more detail may be warranted. Medium
or large scale farming operations should consider hiring
an independent energy consultant to conduct an energy
audit and provide advice and suggestions for increasing
operational energy efficiency. There are three energy
audit levels available in Australia, as defined by the
Australian Energy Audits Standard AS/NZ 3598:2000.
A typical level one audit in a regional location can be
delivered for between $500 – 1000 dollars.
We recommend that farmers commission at least a Level
1 Energy Audit or equivalent. This involves producing
a basic inventory of energy using equipment and
processes and documenting major energy uses. These
audits can be conducted over a single day at relatively
low cost. Many farms, such as intensive production
facilities, will benefit from more comprehensive audits
which include detailed analysis of usage patterns and
opportunities for savings.
Farm energy planning
Different Levels of Energy Audits
• A Level 1 Audit will provide an overview of energy
use and help establish initial benchmarks. It will also
provide some guidance on possible energy saving
opportunities, but these savings are rough and
generally only accurate to within ±40%
• A Level 2 Audit will identify the particular energy
sources being used and the amount of energy
used for specific purposes. It will also provide
recommendations on measures to reduce energy
and its cost with a general accuracy of around
• A Level 3 Audit will involve a more detailed and
comprehensive energy assessment which may
cover a whole building or focus on a specific area
or process. Level 3 audits utilise data logging for
specific equipment to generate detailed energy
use profiles over single days as well as over
prolonged periods (months or even years). The
recommendations from a level 3 audit are much
more accurate and refined, and will therefore
typically express costs estimates with a +10%
margin of error and savings estimates with a -10%
A Level 3 Audit will require more time and effort and
incur a much higher cost than a Level 2 or Level 1
Step 2: Improve energy purchasing
Find better rates
After identifying baseline energy use, review rates for
electricity, gas, and other energy sources.
Farms using more than 160 MWh or $50,000 of
electricity per year are likely to be in a position to
negotiate special contracts. Retailers are looking to
minimise their risk so, so providing them with certainty
and additional information on predicted electricity use
will generally enable then to offer a lower rate.
are higher than off-peak rates, so customers can save
money by shifting electricity use from peak and shoulder
times to off-peak times. However, when employing
renewable energy sources (such as solar or wind), there
are added layers of complexity. Peak electricity rates
generally occur during the day (7am-10pm), when there
is available sunshine that can generate power from a
PV system. This may impact design considerations
around a solar PV system, as well as payback/system
Farmers using less than 160 MWh per year should
ensure they are in the most economical tariff (see below)
and have obtained all available discounts. Discounts
can be obtained by joining a buying group or, in some
instances, by simply asking the retailer. Don’t assume
that the current retailer will automatically offer the deals
they are offering to bring in new customers.
Sourcing liquid and gas fuels at good rates can involve
more complexity, but it may pay to talk to several
suppliers and negotiate prices.
Switch to Off-peak
An important consideration around energy use is timeof-use tariffs (TOU) and load shifting. Many electricity
contracts include different rates for power used at
different times. Typically, contracts include “peak,” “offpeak” and “shoulder” rates. Peak and shoulder rates
Figure 37: Time intervals for peak, off peak and shoulder power
rates (Ausgrid).
Renewable energy in agriculture
Equipment without time restrictions (pumps that fill
tanks or other tasks that require electricity but don’t
necessarily need to be completed at a certain time of
day) can be scheduled to run when the cheapest power
is available. This can be achieved using timers or can
be tied directly to sensors that operate equipment when
renewable energy sources are producing energy (the sun
is shining, the wind is blowing, etc.)
Step 3: Invest in energy efficiency
Programs such as the NSW Farmers’ Energy Innovation
Program and the Energy Efficiency for Small Business
Program (EESBP) determined that most farmers are
capable of reducing their energy use by at least 10%
by implementing energy efficiency measures. In many
cases, however, farmers can achieve savings far in
excess of this figure.
Energy efficiency measures are often the simplest
and least expensive ways to reduce existing energy
Skipping the first steps of the efficiency process will
make it difficult to outline accurate return on investment
scenarios, which are often essential in securing capital
for this type of financial investment.
Step 4: Selecting a suitable renewable
As addressed in previous sections of this guide, there
are differences between each of the main-farm energy
generation technologies, including different advantages,
disadvantages, capital expenditure and investment
return potential for each. Erecting a wind generator in a
property with little wind resource is unsound; much like
installing a biogas plant using anaerobic digestion may
be unsuitable for a farm with little or poor quality waste
generated through the year. The technology must fit
the farm.
Energy efficiency measures
are often the simplest and
least expensive ways to
reduce existing energy
A farmer’s guide to technology and feasibility
Farm energy planning
Understanding relative
energy efficiency –
tricks to watch out for
When it comes to energy, the term “efficiency” can
be confusing and is at times deliberately misused by
vendors of equipment.
In the case of generation technologies, vendors
typically calculate and present efficiency data in the
terms that are most favourable to their particular
The conversion rate of input energy to work done is an
important comparison tool, but is not always relevant
to return on investment, or cost efficiency.
For example, Solar PV cells are around 18-20%
efficient in converting sunlight directly to electricity,
but this efficiency rating is usually irrelevant since,
unless there are space restrictions, a system can be
expanded in order to obtain the required peak power.
Typical pump engines and generators powered by
diesel are more efficient at converting the energy
source, extracting up to 35-40% of the fuel’s energy
(the rest of it is wasted as heat).
However, once installed the solar system’s fuel source
is free: the diesel is not. Comparing cost efficiency
in this case involves comparing the capital cost of
the solar system with the avoided cost of diesel,
maintenance and time.
Radiant versus heat pump heating is another example.
In engineering terms electric heaters are 100%
efficient, as they transform the entirety of their input
energy into heat (the desired end form of energy). That
sounds good until you realise that a heat pump-based
air-conditioning system can be 300-400% efficient
because it leverages the temperature differential
between the indoor and outdoor environment. A
modern reverse cycle unit can provide three to four
times more heating than an equivalent resistive electric
heater for the unit of electricity.
Renewable energy in agriculture
Solar has proven to be a preferred entry
point to renewable energy for many
farmers, due to its flexibility, simplicity
and relatively low entry cost.
Because of its scalability, falling prices
and innovation in battery technology,
we can expect to see ongoing growth in
solar on farm.
Moving forward, we hope to see farms adopting an
integrated suite of complementary renewable energy
technologies. We also hope to see increased community
investment in local generation projects and, related to
this, load shifting, with renewable power distributed
between users on a diurnal and seasonal basis.
Particularly in relation to bioenergy, renewable projects
must be functionally related to production strategy
and will have implications for general infrastructure,
operational procedure and resource allocation. For
example: a poultry farm, dairy or piggery that invests in
an energy plant must commit its waste stream to that
capital asset. Likewise, a farmer wishing to produce
biodiesel must carefully consider the pros and cons of
allocating land and biomass to fuel feed stock.
Farmers who embrace renewable energy start to
think differently about their businesses and also about
collaborative models for financing and operating shared
facilities. For example, intensive animal production
facilities grouped in precincts around a shared waste to
energy plants; biodiesel plants owned and operated by
grain cooperatives.
While it is relatively easy to replace a small proportion
of conventional energy with renewable energy, moving
towards energy independence demands a fresh
perspective within farm businesses and across regional
There is an element of “back to the future” in this since,
decades ago, and before the national energy grid was
established, most regional centres operated their own
local power stations and networks.
Where to go for more advice
NSW Farmers information papers covering renewable energy
and other aspects of farm energy productivity are available by
contacted the members centre on 1300 794 000 or online at
Other important sources of information are:
The NSW Office of Environment and Heritage http://www.
The Clean Energy Council
The Alternative Technology Association.
A farmer’s guide to technology and feasibility
• Fraunhofer ISE. (2014, July). Electricity production from solar
and wind in Germany in 2014. Retrieved October 2014, from
Fraunhofer-Institut für Solare Energiesysteme ISE: http://www.
• NSW Government Planning and Environment; Windlab
Systems Pty Ltd. (2013, November). NSW Wind Map.
Retrieved Nov 2014, from
• Geoscience Australia and BREE. (2014). Australian Energy
Resource Assessment. 2nd Ed. Canberra: Geoscience Australia.
• NSW Trade and Investment. (2014). Renewable Energy Action
Plan Annual Report. Retrieved 2015, from Trade & Investment
– Resources &Energy: http://www.resourcesandenergy.nsw.
Retrieved February 2014, from
• Australian Energy Regulator. (2015, February). Retrieved
February 2015, from Energy Made Easy: http://www.
WIND AND SOLAR. Retrieved October 2014, from http://www.
• BREE. (2014). Australian energy statistics. Retrieved October
2014, from Australian Government: Bureau of Resources and
Energy Economics:
• Dairy Australia Ltd. (2013). Saving Energy on Dairy Farms.
Retrieved November 2014, from
• Energetics. (2014, March). Waste to Energy Information Paper.
Sydney, NSW, Australia.
• Energy Matters. (2013). Guide – Is wind power right for you?
Retrieved November 2014, from
• OEH; Energetics. (2014, November). Energy Efficiency and
Renewables Finance Guide. Retrieved December 2014, from
NSW Environment & Heritage:
• – The Renewable Energy Website. (2014).
Calculate KWh Generated By Wind Turbine. Retrieved November
2014, from
• Scotts Contracting; St Louis Renewable Energy. (2014,
October). Solar Power Feed Bunk Cover Shade. Retrieved
November 2014, from St Louis Renewable Energy: http://blog.
• Solahart Australia Pty Ltd. (n.d.). Solahart Australia. Retrieved
February 2014, from
• Solar Choice. (2014, November 18). Commercial PV Price
Index – November 2014. Retrieved November 20, 2014, from
Solar Choice:
• GSES. (2015). Sydney, NSW, Australia.
• Solar Choice. (2013, May 16). Is a solar leasing program right
for you? Retrieved 2014 November, from Solar Choice: http://
• IEA. (2010, May 11). Solar Photovoltaic Roadmap. Retrieved
October 2014, from International Energy Agency: http://www.
• Solar Choice. (2014, November 17). Residential Solar PV
Price Index – November 2014. Retrieved November 20, 2014,
from Solar Choice:
• IPART. (2013, November 27). Solar feed-in tariffs 2014/5.
Retrieved November 2014, from Independent Pricing &
Regulatory Tribunal:
• Solar Choice. (2014, August 15). Which electricity retailer is
giving the best Solar Feed-in Tariff? Retrieved February 2015,
from SolarChoice:
• GeoExchange. (2014). GeoExchange. Retrieved January 2015,
from GeoExchange:
• Katabatic Power. (2011). Katabatic Power – Wind Speed
Extrapolation with Height. Retrieved October 2014, from http://
• McGahan, E., Barker, S., Poad, G., & Wiedemann, S. (2013).
Conversion of Waste to Energy in the Chicken Meat Industry.
Canberra: RIRDC.
• New South Wales Auditor-General. (2011, November 7).
Special Report – Solar Bonus Scheme. Retrieved February 2015,
• NSW Farmers. (2014). Power from Pig poo. Retrieved from
• SolarChoice; Pike Research. (2013, July 11). What is a “Tier
1 solar panel? Tier 2 or 3? Retrieved January 2015, from Solar
• Stapleton, G., Milne, G., Riedy, C., Ross, K., & Memery, C.
(2013). Wind Systems. Retrieved January 2014, from Australia’s
guide to environmentally sustainable homes: www.yourhome.
• Sustainable Energy Development Authority (SEDA). (2002).
The New South Wales Wind Atlas. Retrieved 2013, from Wind
Power – NSW Trade & Investment:
• The Carbon Trust. (2008, August). Small Scale Wind Report.
Retrieved October 2014, from http://www.wind-power-program.
NSW Farmers
PO Box 459
St Leonards NSW 1590
Head Office:
02 9478 1000
Member Service Centre:
1300 794 000
This publication has been produced by NSW Farmers with assistance from the
NSW Office of Environment and Heritage.
Authors: Gerry Flores, David Eyre, David Hoffmann
© NSW Farmers Association and the NSW Office of Environment and Heritage
All rights reserved
ISBN: 978-0-9942464-0-0
Citation information:
Flores G, Eyre D N, Hoffmann D, Renewable energy in agriculture:
A farmer’s guide to technology and feasibility, NSW Farmers, 2015
Copyright and disclaimer
This document:
•Is copyright to NSW Farmers Association and the NSW Office
of Environment and Heritage
•Is only intended for the purpose of assisting farmers and those interested in onfarm energy generation (and is not intended for any other purpose).
While all care has been taken to ensure this publication is free from omission and
error, no responsibility can be taken for the use of this information in the design or
installation of any solar electric system.
First Edition, May 2015.
Cover photo: Solar PV is widely adopted in
Australia by farmers who operate intensive
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