Solar PV still viable for higher rate tax pay

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News article

Solar PV still viable for higher rate tax payers

November 2011

renewable energy news

Following the Government’s decision to halve the rate of Feed in Tariff (FIT) for photovoltaic panels from 32.9p to 15.2p from 12th December 2011 there has been widespread confusion within the industry.

Fisher German together with accountants, Saffery Champness believe that there is still a window for many higher rate tax payers to make the investment.
 
The current Regulations state that there is £100,000 Annual Investment Allowance remaining available for qualifying plant and machinery until 5th April 2012.  Thereafter this figure reduces to £25,000 per annum.
 
Fisher German and Saffery Champness can confirm that in the majority of cases photovoltaic panels qualify for this very generous tax allowance.
 
Based upon a gross cost of say £90,000 for a 50 kilowatt scheme this would mean the net of tax costs for a 50% tax payer will reduce to £45,000.
 
The returns from a 50 kilowatt photovoltaic scheme would give a higher rate tax payer investor a return of in excess of 13% and if the electric is used by the tax payer himself then this rises to 15%.
 
Despite the recently announced cut in Feed in Tariffs, these returns still represent a very attractive investment, particularly for the higher rate tax payer and would remain available for any schemes commissioned prior to 5th April 2012.  
 
Darren Edwards comments “Coupled with these benefits, the reduction in FIT payments will create a glut of unsold solar PV panels in the UK. We are already seeing large reductions in quotation prices for the installation and build of these projects.”
 
For further details, please contact:
 
Fisher German – Darren Edwards – 01858 411246 – darren.edwards@fishergerman.co.uk
 
Saffery Champness – Jane Hill – 01733 353301 – jane.hill@saffery.com 
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