You may have heard about Feed In Tariffs ("FITs"), the incentive payment introduced in April 2010 to improve the economic viability of renewable energy schemes, particularly solar PV, wind, hydro and anaerobic digestion.
You may have been wondering how you might cash-in on the apparent "gold rush". If you have a suitable site, you may have been by one or more developers, keen to sign you up to an option to lease.
So, is it as good as it sounds?
On the face of it, yes: a guaranteed, inflation-linked return for 20 to 25 years, with the potential for energy self-sufficiency, is an appealing prospect.
There are, as with so many things, pitfalls for the unwary:
- Proper technical feasibility studies need to be undertaken; postcode maps of wind-speed or solar radiation might be some way off the actual performance of your specific site, significantly affecting the return of the project.
- There are a wide range of technologies and equipment on the market, some will be right for your project, some will not.
- The structuring of the project will impact on funding, tax consequences and risk.
- In the case of options to lease, prospective tenants may have little or no track record and contract terms may be heavily weighted in the developer's favour.
- Options to lease may impact eligibility for Single Farm Payment and your tax position.
Overall though, whatever renewable project you are contemplating, it should be appropriate to your business.
Our renewable energy accounting and tax services cover multiple technologies including wind, solar, geothermal and biomass.
We offer an array of accounting, tax and business advisory services specific to the renewable energy industry. We will tailor our services so that we are able to offer a unique and bespoke service to investors, developers and producers these include:
- Audit & Accountancy services
- Cashflow management
- Profit improvement
- Tax Planning opportunities
- Outsourced accounting services
- Management accounts preparation
- Corporation Tax calculations and planning
- VAT calculations
- Capital Allowances
- Key performance indicator analysis (KPI's)
- Advising on financing arrangements
- Grooming businesses for sale
- Bookkeeping, Payroll and P11ds
- Enterprise Zone issues
- EMI schemes
- Enterprise Investment Schemes (EIS)
- Tax investigation insurance
For more information please contact Iain Sim or Gill Groom.