Agriculture Capital Allowances for Solar Energy - Time Is Running Out
Government legislation for the 2012/13 tax year will see HMRC capital allowances for solar energy installations by agricultural businesses decrease from £100,000 to £25,000, but businesses still have time to enter into an agreement with a solar PV installer and benefit from the higher allowance figure.
The reduction in capital allowance will coincide in timing with a potential reduction in Feed In Tariffs for solar PV, which will reduce the earnings on a solar installation as well as significantly reduce tax relief for the 2012/13 year. Delaying the decision to invest in solar now could result in a farmer missing out on 25 years of income.
A professionally managed planning application for a roof-based solar PV installation takes at least 10 weeks, and applications to the Electricity Network providers can be complex, so farmers need to finalise the detail of their installations to enable an installer to obtain approvals in time for the April deadline.< /p>
It is important to work with an experienced agricultural solar PV company who has the technical expertise to guarantee that all roof-based installations ordered by 31 December 2011 be installed in time to qualify for the current capital allowances. Of particular importance is experience in dealing with roof strength, network strengthening, asbestos and ammonia rich atmospheres which are particular to agricultural environments.
As well as generating free electricity to feed a farm's own consumption, many roof based solar PV installations produce surplus energy which can be sold into the National Grid. This provides the business with a Feed in Tariff [FiT] payment for every unit of electricity generated, as well as a payment for every unit exported for a period of 25 years, and FiT payments will increase annually in line with the Retail Price Index.
Together with the Feed in Tariffs, the current HMRC capital allowances provide for fast pay-back periods and hi gh returns on solar PV installations, quickly putting farmers in the position where they have free electricity for their own use, reduced tax bills, and, an attractive additional income stream.
If there are two things that were made for each other, it's farmers and renewable energy. These businesses offer a significant part of the solution to the UK's energy and food security and can help to reduce carbon footprint. Farmers have a unique and immediate opportunity to diversify their business into the solar energy generation market - and there are tremendous capital incentives to act now.
Hestia
http://www.hestiaservices.co.uk
Founded in 1993, Hestia is a well-established British renewable energy company which provides quality photovoltaic [PV] installations to agricultural businesses and farmers. Hestia offers a variety of financial and analysis tools and tailored financial packages specifically aimed at farmers considering investing in solar, including free solar PV systems. Hestia offers market leading warranties, and uses only leading product technology.
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