Its plans were rejected by the council's chairman who cast the deciding vote.
Jonn Barnes, project developer for E.ON in the UK, said: "We were naturally disappointed with the council's decision as we firmly believe that Tedder Hill is an ideal location for a wind farm."
He added that following an independent consultation the firm still believes the site has the potential to become a wind farm, a move that would cause minimal disruption to the landscape and community in the region.
The proposed project would have provided almost 4,000 homes with electricity and save 7,790 tonnes of CO2 from being pumped into the atmosphere every year.
According to the Guardian, the government is set to miss its own target on reducing CO2 emissions a 20 per cent reduction by 2010.
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