Subsidy for large scale solar projects are changing

Last week the government announced a consultation on changes to the subsidy system for large scale solar projects of over 5MW capacity which would equate to a site of about 30 acres. Originally it was planned that the current subsidy system which is involves so called Renewable Obligation Certificates (ROCs) was going to be phased out by 2017 but the latest proposal is to phase out ROCs for the large scale developments by 31st March 2015.

I suspect the primary reason for this is that there has been a huge expansion in solar development and as the general public have started to see these projects popping up in the countryside, support for such projects has started to dwindle.

The initial phase of the fund was worth up to £5000, but towards the end of April the government announced that the level of grant would be increased to £35,000 and the deadline for making an application was also extended 27 June 2014.

The government has committed £10m to this fund and it is understood money is still available and so farmers are urged to consider making a claim. The initial claim process was quite onerous but it is understood the requirements have been relaxed to some extent to make it more practical to make a claim.

It should also be understood that if a farmer has already made a successful claim under the first phase of the grant process, he or she is still eligible to make a claim under the second phase up to a cumulative total of £35,000.

The grant is aimed at the cost of restoring flood affected land back to agricultural production and concentrates on four key areas. These include the restoration of productive grassland, the restoration of productive arable and horticultural land, restoring farm vehicle access to fields and improvements to agricultural drainage.

Therefore the cost of employing a contractor to sort out damaged soil structure and re-seed the land with a perennial grass seed mix would be eligible for grant aid.

It seems likely that many farmers have decided to just get on with restoring their land to production without making an application for grant aid but Rural Surveyor, Arthur Chambers from Carter Jonas’ Wells office, “Urges farmers to consider taking advantage of any funding which may be available to help those affected by the wettest winter on record”

Arthur goes on to say, “This is an opportunity which should not be missed and with only a month before the grant scheme closes, anyone interested in making a claim is encouraged to contact their preferred agent.” Arthur can be contacted on 01749 677667.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Changes in the subsidy system for solar projects

Last week the government announced a consultation on changes to the subsidy system for large scale solar projects of over 5MW capacity which would equate to a site of about 30 acres. Originally it was planned that the current subsidy system which is involves so called Renewable Obligation Certificates (ROCs) was going to be phased out by 2017 but the latest proposal is to phase out ROCs for the large scale developments by 31st March 2015.

I suspect the primary reason for this is that there has been a huge expansion in solar development and as the general public have started to see these projects popping up in the countryside, support for such projects has started to dwindle.

It has been significantly easier to obtain planning consent for Solar parks than for wind turbines for example and as a result the scale of solar developments across southern Britain in particular has probably taken everyone by surprise, hence the government’s latest consultation.

After 31st March 2015, large solar projects will have to bid competitively for funding against all other forms of renewable energy production through a scheme called “Contracts for Difference” (CfD). As solar production is generally regarded as one of the less efficient forms of renewable energy production, it remains to be seen how well solar energy will compete for funding through this new scheme.

However, what this demonstrates is that the renewable energy sector, which is heavily reliant on subsidy, is a risky sector to be involved in because the government has a track record of chopping and changing its policy. These changes may be as a result of public pressure or the realisation the level of subsidy being offered is inappropriate, but for whatever reason this makes planning a renewable energy project very difficult.

It seems likely that if the ROCs are removed in March next year that we will see a headlong rush to develop out all the sites which are capable of being developed over the next year and so don’t be surprised to see a significant increase in the number of solar parks being developed in the coming months.

I am sure there will be many readers who will be pleased to hear that it is likely the development of large scale solar parks may now be curtailed but equally one cannot help wondering where our electricity will be coming from in 5 years time as many coal fired power stations are being decomissioned. Fracking is likely to be the next big source of energy and so perhaps all the antis need to be careful what they wish for. Maybe a few more wind turbines would not be a bad idea after all.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Carter Jonas picks up two ESTAS awards

Our Residential Lettings team were represented and collected two awards at THE ESTAS AWARDS “Estate & Letting Agent Awards 2014” on Friday, 9th May 2014. “Best Medium Lettings Chain” and a “People Award” for our Bath Head of Lettings Sharon Hunter – only awarded to 5 individuals nationwide.

The Awards are in their 11th year and were hosted by Phil Spencer, the TV property expert.

The ESTAS determines the best Estate and Letting Agents in the country through research carried out amongst customers. There were 790 entries and 32,000 questionnaires completed.

I would like to personally thank all of our Clients for voting for us and give my assurance that we will continue to strive to deliver good customer service.


Lisa Simon, 
Partner
Head of Residential Lettings
T: 020 7518 3234 
E: lisa.simon@carterjonas.co.uk

Falling beef prices - serious concern for the livestock sector

The fall in the beef price being received by farmers is becoming a serious concern for the livestock sector.

Over the last few years beef prices have steadily risen peaking at over £4/kg deadweight but in the last six months in particular this trend has reversed and as a result many beef farmers are facing significant losses.

The price of beef has dropped by over 10% during the last twelve months while the price of beef on the supermarket shelves continues to stay firm or edge upwards which is causing British beef farmers significant concern.

This time last year the average price of a “standard steer” was £404p/kg which compares to a price of £362p last week and the price quoted by abattoirs to farmers continues to fall week on week.

What this means in real terms is that an beef animal weighing say £350kg deadweight will be worth £150 less this year than last year and because the margins on beef production are very low at the best of times, it seems likely beef fattening units in particular are going to face some significant losses over the coming months.

Indeed without support payments from Europe most livestock farmers in this country would simply not make a profit anyway and with such payments looking likely to reduce as we move in to the future many beef farmers will have to seriously examine the viability of their business model.

The problem is not helped by the fact that the retail outlets are dominated by the supermarkets which always brings in to question whether there is a fair market place between the many small farmers and the few big retailers. This is exacerbated by the fact that the number of abattoirs in this country is also dwindling, which further impacts on a farmer’s ability to influence the price they can achieve.

It is also interesting to learn that many of the abattoirs are owned by Irish firms and whether this influences the amount of Irish beef which is imported in to this country is open to question. Having said that Irish beef farmers are also struggling and so it may just be the low price of Irish beef which is influencing imports.

But what is clear is that on the supermarket shelves, British beef is often sold alongside Irish beef with no obvious distinction. Accordingly the NFU has called on retailers to stop mixing British and cheaper Irish beef on their shelves and to consider promotions to reignite consumer demand.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

A little knowledge can be a dangerous thing

Does access to all kinds of information and knowledge at our fingertips really make experts of us all? Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, still values expert advice.

Computer coding becomes part of the National Curriculum in September this year and not before time really as the ability to code will be another pillar of education basics alongside the established three Rs for a numerate and literate society as we make our way in the 21st Century. Already, many primary schools run after-school coding clubs with the assistance of code-literate parents under the supervision of school’s own ICT staff.

While my heart lifts at coding’s inclusion in the curriculum, the same heart sinks a little at hearing of a training business which aims to teach executives to code in a day. It sinks in the same way as those of GPs when patients come to their surgeries with symptoms and diagnoses they’ve been researching on the Internet.

Okay, may be the course doesn’t promise to make the executive a coding expert in a day and it is laudable that knowing how to code is a vital business skill coding is being acknowledged, but there are no guarantees that senior and middle ranking execs – whose expertise is very much not in the nuts and bolts of coding - who leave that course won’t think they know enough in a day to pronounce an opinion on the matter and make business decisions based on a course which has cost a lot of money. As the saying goes, a little knowledge can be a dangerous thing and especially so in the minds of hands-on company executives.

It could also be seen as quite insulting to people who have coding expertise which has been gained after years of study and practice. A coding course does sound sexy in the way that chartered accountancy or company law in a day doesn’t. Both are crucial to the running of a company but it’s hard to imagine a day’s course attracting interest from the time-pressed modern exec.

Sending shudders through residential property peers will be news of the alliance between the founders of Poundland and Match.com who are coming together in the form of Estatesdirect.com to cut out the middlemen estate agents when it comes to housebuying and selling. Good luck with that in a housebuying chain of more than one.

It seems that with access to all kinds of expert knowledge and information at the touch of a button or the swishing of fingertips across a screen, we like to think we do or can know-it-all. It is almost as if there is no respect for true experts who have studied and practised in their particular field for years and can give advice based on that expertise.

Aptitude and application aren’t as valued as they used to be or as treasured as they should be and we view experts with a degree of suspicion more than we used to.

While there has always been a counterpoint to most expert opinion, we don’t have to shift ourselves to go and find it these days in the way we did pre-Internet access. A world wide web of contra-opinion to those of the expert with whom we think we disagree or whose opinion we don’t want to hear is laid bare before us to access instantly – as long as there’s Wi-fi connection, of course.

In the dynamic of the client-advisor business relationship, you will often find that clients don’t like what expert advisors have to say to them because it is not what they want to hear. While they don’t have to like it, it is important that they respect it. Equally, the adviser needs to respect the client’s decision to ignore the advice or seek that of another expert which may better suit the client’s own view.

Calling yourself an expert can be as easy or as hard as you like to make it in the modern age, depending on your level of integrity. But that’s just IMHO, of course!

Will Mooney MRICS
Partner
Commercial, Cambridge

The British bull market on the turn...

The bull market in British Agriculture may now be on the turn. As the wider economy starts to improve commodity prices look as though they are easing.

As predicted a few weeks ago, milk prices are beginning to fall – whether this is due to falling world markets or supermarket milk prices wars is not clear, but this week alone we have seen Arla drop their milk price by 1.27p/litre while Muller Wiseman has dropped its price by 1.6p/litre and First Milk by 2p/ litre from 2nd June.

Similarly beef prices are easing. The deadweight price for beef has dropped to around 355p/kg which is over 40p/kg less than a year ago while beef prices in the supermarkets have continued to increase, reducing the proportion of the retail price received by farmers from 60% this time last year to just over 51% today.

As far as arable farmers are concerned, wheat prices have also fallen from around £190/t a year ago to under £165/t today and oilseed rape prices by £70/t, from £374/t a year ago to £304/t today.

So it seems all sectors are feeling a chill breeze although it has to be remembered prices are falling from record levels in some instances. Even so one begins to wonder whether we are beginning to see a trend in reduced agricultural commodity prices as the world economy starts to pick up in the wake of the dramatic events of 2007/08 which shook the financial industry to its core.

It is often said that the agricultural economy is counter-cyclical to the wider economy and so after seven years of famine in the latter, maybe we are about to enter a similar period in the former. This may be being alarmist but there is definitely a feeling that we have seen the best of commodity prices for the time being.

This is also a reflection of the fact that the price farmers receive for their produce in this country is now very heavily influenced by world commodity markets. For instance the political instability we have seen in the Ukraine in recent months has to an extent bolstered the price of wheat as traders in world markets have reacted to fears that these troubles may impact on the supply of wheat from the Ukraine which is one of the world’s significant wheat producing areas.

So, a farmer’s profitability is only in part dictated by their skill in animal and crop husbandry or their general business acumen; it is the state of world markets and the vagaries of foreign exchange markets which is likely to have as great if not greater influence on the success or otherwise of a farming business.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk