Windfarms and house prices

[by Dr Steve Gibbons] News this morning suggests that communities near new wind-farm developments could be in for some form of compensation, through lower electricity prices or other payment schemes. The BBC reports that the compensation could be worth as much as £100,000 per community http://www.bbc.co.uk/news/business-22791815. This is probably welcome news for residents potentially affected by wind-farm developments, although provisional findings from on-going research suggests that this level of compensation may not cover the costs involved, in terms of environmental, health and other impacts. I find that an operational wind farm reduces housing prices by around 7% up to 5km from the wind farm site. Some rough calculations based on these estimates suggest that the implied social costs on the local community (within 5km) amounts to about £80 million per operational wind farm, or about £500 per household per year.