The sight of solar parks and wind turbines are not to everyone’s taste but such visual impacts must be balanced against the prospect of more extreme weather patterns associated with climate change.
I will pin my colours to the mast – I do believe that burning fossil fuels is contributing to climate change.
I recall doing A-level chemistry back in the early 1980s and when my teacher explained the potential impact of liberating greenhouse gases into the atmosphere, and many of his predictions appear to be coming true.
For instance 2014 was the warmest year on record in the UK and eight of the UK's top ten warmest years have happened since 2002. Similarly 2014 was the fourth wettest year since the Met Office records started in 1910, meaning we have experienced five of the UK's top six wettest years since 2000.
I believe this is sufficient evidence to make us think very seriously about the impact that burning fossil fuels has on our climate. But the government has taken a retrograde step in turning off support for many renewable projects so abruptly and yet at the same time also appears to be encouraging fracking. This does not make climatic sense.
Then we saw our government do a deal with the Chinese government over the building of a new nuclear power station at Hinkley Point, demonstrating that David Cameron does see the need to subsidise non-carbon energy production to provide security of supply. I do not disagree with this but I do question the muddled thinking regarding the government’s wider energy policies and the impact this is having on the renewable energy sector in particular.
This sector has grown strongly from virtually nothing over the last 10 years and has become increasingly efficient with the result that solar projects are on the verge of becoming cheaper than gas as a means of generating electricity.
Therefore reducing subsidy for solar projects was the right thing to do, but cutting it by 87 per cent is too extreme and will constrain the development of this form of renewable energy which has not only helped reduce the production of climate damaging gases but also provided opportunities for many farmers and landowners here in the South West.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
A property blog written and authored by our specialist blogging team, discussing all and any matter relating to the residential, rural and commercial property markets.
Showing posts with label solar parks. Show all posts
Showing posts with label solar parks. Show all posts
Thursday, 12 November 2015
Monday, 19 May 2014
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.
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
Monday, 14 April 2014
Tax reliefs for farmers
Accountants are always advising farmers to manage their affairs carefully so as to be able to take full advantage of the potentially generous reliefs which may be available to them under the Inheritance Tax (IHT) regime.
However, according to Catherine Desmond of accountants Saffery Champness, the National Audit Office (NAO) is launching an investigation in to the misuse of Agricultural Property Relief (APR) and Business Property Relief (BPR), both of which are very important reliefs available to farmers which can reduce or potentially illuminate the need to pay IHT on death. But with an impending investigation by the NAO it seems inevitable that claims for such reliefs will be brought under ever increasing scrutiny.
Accordingly farmers are advised to review their farming business regularly to ensure any changes in farming structure, ownership or occupation do not impact on their potential tax liability.
For example recent changes in planning regulations may encourage some farmers to argue buildings are no longer in agricultural use but the flip side of that coin will be that the Revenue may look to claim such buildings have a value on which reliefs may not be available.
Similarly we will all have seen Solar Parks and other renewable energy projects popping up all over the place and it may be that these developments will change the IHT status of the land and possibly the wider farming business depending upon the scale of the project. Further, another popular device used by landowners, who want to be seen to be farming rather than letting land for IHT purposes, is a contract farming agreement whereby the landowner employs a third party to carry out the farming operations on their behalf. In simple terms arrangement involves the landowner/farmer paying for all inputs over and above the contractor’s charges and then the landowner/farmer benefits from the profits, or losses generated once the crop or other produce has been sold.
This exposes the landowner to the true risk of running a farm but in many cases, although the written agreement may be satisfactory, the reality on the ground may be very different with the contractor effectively “farming” the land while the landowner receives a payment which is more akin to a rent than profit. Such an arrangement may fall foul of scrutiny by the Revenue which could be very costly if this resulted in the value of the land being taxed at 40% rather than receiving 100% relief from tax under either APR or BPR rules.
So the message is that farmers who are growing older should sit down with the family and their trusted professional advisors to ensure they take advantage of any tax reliefs that may be available or are at the very least are appraised of the potential IHT liability if they were to die in a relatively short period of time.
This all seems quite sensible but very often families do not want to discuss the inevitable for one reason or another or professional fees are perceived to be too high and as a result such discussions may not take place until it is too late which in the worst case scenario may jeopardise the future of a family farm.
However, according to Catherine Desmond of accountants Saffery Champness, the National Audit Office (NAO) is launching an investigation in to the misuse of Agricultural Property Relief (APR) and Business Property Relief (BPR), both of which are very important reliefs available to farmers which can reduce or potentially illuminate the need to pay IHT on death. But with an impending investigation by the NAO it seems inevitable that claims for such reliefs will be brought under ever increasing scrutiny.
Accordingly farmers are advised to review their farming business regularly to ensure any changes in farming structure, ownership or occupation do not impact on their potential tax liability.
For example recent changes in planning regulations may encourage some farmers to argue buildings are no longer in agricultural use but the flip side of that coin will be that the Revenue may look to claim such buildings have a value on which reliefs may not be available.
Similarly we will all have seen Solar Parks and other renewable energy projects popping up all over the place and it may be that these developments will change the IHT status of the land and possibly the wider farming business depending upon the scale of the project. Further, another popular device used by landowners, who want to be seen to be farming rather than letting land for IHT purposes, is a contract farming agreement whereby the landowner employs a third party to carry out the farming operations on their behalf. In simple terms arrangement involves the landowner/farmer paying for all inputs over and above the contractor’s charges and then the landowner/farmer benefits from the profits, or losses generated once the crop or other produce has been sold.
This exposes the landowner to the true risk of running a farm but in many cases, although the written agreement may be satisfactory, the reality on the ground may be very different with the contractor effectively “farming” the land while the landowner receives a payment which is more akin to a rent than profit. Such an arrangement may fall foul of scrutiny by the Revenue which could be very costly if this resulted in the value of the land being taxed at 40% rather than receiving 100% relief from tax under either APR or BPR rules.
So the message is that farmers who are growing older should sit down with the family and their trusted professional advisors to ensure they take advantage of any tax reliefs that may be available or are at the very least are appraised of the potential IHT liability if they were to die in a relatively short period of time.
This all seems quite sensible but very often families do not want to discuss the inevitable for one reason or another or professional fees are perceived to be too high and as a result such discussions may not take place until it is too late which in the worst case scenario may jeopardise the future of a family farm.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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