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income from renewables

Feed In Tariff

There are now a number of renewable energy options that are eligible under government incentives such as the Feed In Tariff (FIT). With an index-linked return for 20-25 years it is not surprising that we are seeing many farmers and land owners choosing this option.

The difficulty lies in choosing the type of energy that is right for you and how to finance it. Initially there are two choices:

·         landowner owned, or
·         leasing to a developer

Owning and running a renewables project yourself enables you to be the sole beneficiary from the FIT, which can be considerable. However, this option means that you have to finance the capital outlay for the project; this can be sizable depending upon the scale you choose. We can provide information relating to all aspects of energy development from site selection to grid connections, and charge a fixed rate throughout our instruction, rather than taking a percentage of your FIT.

Leasing your land to a developer or electricity distribution network solves the issue of funding, but inherently means that they benefit from the FIT and in return they pay you a proportionate payment. Choosing the leasing option creates a number of ways in which the landowner can be remunerated, such as: option payments, rent, and additional royalties from power sales. All of these are negotiable and our involvement can ensure that you are getting a competitive payment, as well as benefiting from a fair share of the revenues from energy sales.

Issues relating to maintenance, insurance, security and replacement equipment should also be carefully looked into before signing any agreements. We can also advise on the lease both from a practical and legal point of view.

Renewable Heat Incentives

Renewable Heat Incentives (RHI) come into effect from 1^st April 2011, and are similar to Feed In Tariffs, but relate to heat and gas incentives as well as electricity generation. Effectively an estimate is required of how much heat your renewable heat system produces and OFGEM (Office of the Gas and Electricity Markets), the UK gas and electricity network regulator, will pay you a fixed amount based on this estimate.

These incentives will support a wide range of technologies including:

·         air & ground source heat pumps
·         solar thermal
·         biomass boilers
·         renewable combined heat & power
·         use of biogas & bioliquids and the injection of biomethane into the natural gas grid.

Renewable heat systems completed after the 15^th July 2009 that meet the qualifying conditions will be able to claim the RHI.

Townsend Chartered Surveyors are independent advisors and are not tied to any technology suppliers, contractors or energy distribution network.

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