Capital Allowances for Solar electric system

[andy71]

Hi, can anyone help me out. I am a private landlord and I about to install solar electric systems on several of my properties but I am not sure whether i can claim capital allowances under the integrated features rules or any rules for that matter. I am doubtful as the income from the systems is tax free.

Thanks

[Telometer]

No capital allowances are available in respect of the residential element of residential property.

I have no experience of the situation you describe but wonder whether you are in fact running a trade of electricity generation, which would entitle you to AIA/capital allowances giving rise to a trading loss (on the grounds that the income is non-taxable) that could be offset against other income. Maybe somebody else knows of anti-avoidance legislation to prevent this.

[andy71]

hi, thanks for the response-it is quite complex. The intention is to supply the tenants with all or part of the energy requirement- so in that sense yes it is like an energy generator. The income from the tenants for the electricity would be taxable although the income I will get from the feed in tariff is not. ok probably need specific tax guidance on this.

[billericayboy]

The only problem is that you will be generating power in the day time and the T will be using it in the evenings and night.

We have PV and earn money in the day 45p per KWh and buy it back at 13p per KWh.

How will you meter your T's usage, the difference btween Total Generation and the meter reading on a monthly basis ? Give it to the T free and just take ther FITs. Less paperwork and no tak to pay on it.

[subjecttocontract]

The whole problem with any form of solar power generation is how one stores the output.

When the system is operating at its most efficient.....when the sun is shining & its really hot.....we don't normally need extra heat. The only 2 real practicle opportunities for storage are a) domestic hot water b) heating a swimming pool. The latter isn't importnant for most people cos they ain't got a pool.

[billericayboy]

I think the OP is refering to Photo Voltaic (PV) Solar which has some solar panels on the roof which produce a low DC voltage and is then combined and turned into a 240V AC form to either be sent back into the grid or used in the property.

A 2KW system in the UK will cost about £10K to £12K to install, then you will earn about £1K per year for 25 years from the system and have FREE electric.

Our background consumption is about 1.5Kw so when the sun shines we are earning 41p per Kw per hour and running the house's power. when we boil the kettle or cook the power is topped up from the grid and we pay 13p per Kw.
In the day we are earning money and any excess is put back in to the grid vie the fuse box and meter and turning the meter backwards.

where can you invest £10K and receive 10% return per year, and over the life of the system you make a £15K profit. if the system lasts beyond the 25 year gauranteed life then you earn more money.

There are discussions about WET-Fits for getting paid to solar heat your hot water in your water tank but we have to see the government sign this one. You spend £5K on a new cylinder and some panels on the roof and get free hot water and they pay you for not burning gas !!!

What is even better is that the money raised from the systems is TAX FREE.

[subjecttocontract]

I think your post makes a number of assumptions....

A 2KW system in the UK will cost about £10K to £12K to install, then you will earn about £1K per year for 25 years from the system and have FREE electric.

1. Interest charges would need to be added if the installation was paid via a loan.

2. The return on the investment ends if the property is sold and many people wont live in the same house/ location for 25 years.

3. Rules can be changed by governments at any time.