Government legislation for the 2012/13 tax year will see HMRC capital allowances for solar power installations by agricultural enterprises lower from £100,000 to £25,000, but corporations 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 possible reduction in Feed In Tariffs for solar PV, which will reduce the earnings on a solar installation as nicely as considerably cut down tax relief for the 2012/13 year. Delaying the choice to invest in solar now could result in a farmer missing out on 25 years of earnings.
A professionally managed planning application for a roof-based solar PV installation takes at least 10 weeks, and applications to the Electrical energy Network providers can be complicated, so farmers require to finalise the detail of their installations to enable an installer to acquire approvals in time for the April deadline.
It is necessary to function 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 existing capital allowances. Of particular value is experience in dealing with roof strength, network strengthening, asbestos and ammonia rich atmospheres which are particular to agricultural environments.
As well as producing free of charge electricity to feed a farm's own consumption, many roof based solar PV installations create surplus energy which can be sold into the National Grid. This provides the small business with a Feed in Tariff [FiT] payment for each and every unit of electrical energy generated, as nicely as a payment for each unit exported for a period of 25 years, and FiT payments will raise annually in line with the Retail Price Index.
Together with the Feed in Tariffs, the current HMRC capital allowances produce for rapid pay-back periods and high returns on solar PV installations, easily putting farmers in the position exactly where they have absolutely free electrical power for their personal use, lowered tax bills, and, an appealing further income stream.
If there are two items that were created for each and every other, it's farmers and renewable power. These businesses offer you a important component of the resolution to the UK's power and food security and can help to lessen carbon footprint. Farmers have a unique and immediate chance to diversify their small business into the solar energy generation industry - and there are tremendous capital incentives to act now.
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