Plans for five wind turbines and a visitor centre for a site at Shebster, near Thurso, have been refused by the Scottish government.
Highland Council had previously turned down the proposals, but the local family behind the project appealed against the decision.
The government reporter who considered the appeal said in its own right the scheme may have been approved.
But he said permission had already been given to 21 turbines on nearby land.
The reporter said giving the go-ahead to both projects would mean local residents having wind turbines less than a mile to the north and south of their homes.
In January, the government approved the £80m Baillie wind farm.
Its turbines will feed electricity into the controversial upgraded Beauly to Denny power line to supply 25,000 homes.