Thinking of investing in renewable energy? Old Mill can advise you

You may have heard about Feed In Tariffs ("FITs"), the incentive payment introduced in April 2010 to improve the economic viability of renewable energy schemes, particularly solar PV, wind, hydro and anaerobic digestion. You may have been wondering how you might cash-in on the apparent "gold rush". If you have a suitable site, you may have been approached by one or more developers, keen to sign you up to an option to lease.

So, is it as good as it sounds?

On the face of it, yes: a guaranteed, inflation-linked return for 20 to 25 years, with the potential for energy self-sufficiency, is an appealing prospect.

There are, as with so many things, pitfalls for the unwary:

• Proper technical feasibility studies need to be undertaken; postcode maps of wind-speed or solar radiation might be some way off the actual performance of your specific site, significantly affecting the return of the project.
• There are a wide range of technologies and equipment on the market, some will be right for your project, some will not.
• The structuring of the project will impact on funding, tax consequences and risk.
• In the case of options to lease, prospective tenants may have little or no track record and contract terms may be heavily weighted in the developer's favour.
• Options to lease may impact eligibility for Single Farm Payment and your tax position.

Overall though, whatever renewable project you are contemplating, it should be appropriate to your business.

At Old Mill we have helped many clients in dealing with these and similar issues, so are well placed to advise on your project and how to make the most of the opportunity.

For advice, or just to find out a bit more about whether renewables might be right for you, contact Mark Neath on 01392 280337.