17:10 PM, 1st February 2011, About 10 years ago 6
Some landlords have had the bright idea of making money from their tenants by renting their roofs to solar energy firms that generate power they can sell.
It may seem barmy, but a new law passed last year let’s home owners power their homes for free and sell any excess electricity to the National Grid.
The problem is, the home has to have the ‘right ‘ roof to take advantage of the deal.
To qualify, your house must:
Roofs ticking these boxes will generate about 2,800 kilowatt hours of electricity a year, rain or shine. The further south your buy to let, the more KwH are likely to be generated as homes on the Isle of Wight and in Cornwall should expect more hours of sunshine than those in the north of Scotland.
Generate income from selling electricity
The government-backed feed-in-tariff would pay 41.3p for each kwH – adding up to £1,156 a year.
The drawback is the cost of installation – at an average of £14,000 per home.
The options are buying and fitting your own system and selling your excess power to the grid or picking up free electricity for life and letting a firm cover the cost of installing the panels and the cash from any excess supply generated.
Property investors running furnished holiday lets might also qualify for an extra tax break – if the government lets them keep lucrative capital allowances after April.
Furnished holiday let tax laws are awaiting finalisation in the Finance Act, which comes in to force on April 6.
Solar panels could fit the definition of plant and machinery that attract a 100% tax write-off as an Annual Investment Allowance (AIA) in the year they are purchased – meaning the cost of installation is balanced off against income tax.
For many holiday lets, writing off £14,000 would wipe out taxable profits for several years – and meanwhile the solar panels would generate free electricity and an income in the meantime.
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