The Accidental Smallholder Forum
Smallholding => Renewables => Topic started by: Sudanpan on August 15, 2011, 06:57:30 pm
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We were thinking about the whole PV panels (though we don't have the money at the mo!) and were wondering about how HM Revenue and Customs deals with the FITS - do they tax you on the income stream? If they do then it makes the whole pay back period alot different and would be really bad news if you are on a higher tax bracket (not that we are unfortunately :o :o )
Thanks
Tish
ps I like the Renewables section Dan ;D ;D
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Yes, feed in tariffs are tax free for home owners, as long as the generation is 'incidental' to your domestic demand - generally this means systems under 4kW, and the tariff rates drop off over that size anyway.
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You also pay less VAT when purchasing PV systems.
Sorry Dan I need to reword you slightly. A system that is 4kW or under is a domestic system and is not taxed if your supply is higher and you have space and money you can get a larger domestic that doesn't look as atractive through FIT's but still can earn a nice income. The tarriffs have just been changed due to larger installations (farmers fields) cashing in on the higher rates, the tarriffs were supposed to encourage more domestic users to take advantage but they forgot initially to cap it.
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I am going for a 4kw system this summer. Tesco are offering a 20% off deal and have quoted me the best price out of the eight company's I approached. They all however, said the same thing, that the present tariff for domestic systems is likely to change in the next tax year to be less favorable. At the moment the deal is for 41.3p/Kwhr for every unit produced plus 3p/Kwh exported surplus, and yes, yes, yes tax free. They are also offering club card points. Hmmmmmm. Tesco.
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We are having 8kW fitted at the end of the year but I am interested to hear about Tesco's offer.
I might look into that.
I expect our eletricity usage will increase in the near future as we are having ground source heating in the new house and will be getting another freezer for all the lamb, pork and veg that's starting to stack up :) ;) :D
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with any deal you get it will be locked in for 25 years, we haven't heard anything about the rates changing again except on non domestic. The cut off for the new changes was end of July 2011 so the rates are the new rates and should not change in the near future.
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Yes, if you have signed up during this part of the program then the govt must honor the 25 year deal. For folks who are in the next tranche of installations the feed in tariff for domestic may not be as good. The feed in tariff is likely to go down as the target for electricity being produced from renewable sources in the UK gathers momentum towards the target set by the EU. This is what happened in Germany who are way ahead of us on domestic solar installations. I am only repeating what I been told by the guys who have given me quotes for my solar panel installation, but the information was pretty consistent across a wide range of firms.
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The words "government" and "honour" seem incongruous in the same sentence.