Category Archive: Energy

The Sun Is Still Shining – Solar Opportunities In Your Area

Developments of new solar projects have become increasingly more popular in the North of England again after the government axed the support mechanism back in 2015. It has become clear that with the current lower equipment costs, increasing energy prices, and ever-improving technology, solar has made a comeback for its financial viability even without support from the government.

The key question is how should you as a landowner decide whether to lease your land to the solar developers?

Some of these answers may include the size of the site, suitability, grid capacity, expected financial returns, and of course the ‘Big T’ – tax implications.

Sizing of the site

It can be assumed that 1mW of installation will require approximately 2 hectares of land. Generally criteria for a site is the bigger the better – meaning the development companies will benefit from economies of scale.

Typically, in the north, sites tend to be over 40 ha however this is dependent on the individual project.

Suitability

Sites should ideally be south facing as this will benefit from sun and daylight for the longest length of time in any one day, however, this doesn’t mean that if a small portion of the allocated land is north facing the whole site would be discounted.

In terms of the topography of the land preferences from developers is that the land is relatively flat, this stops shadowing, decreasing the amount of generated energy.

Similarly, the proximity of the nearest sub-station is vital, as the overheads to install power cables back to the station can incur large costs.

Site Finding

Using in-house mapping technology and Ordnance Survey data, every 50m² of the UK can be colour coded into the bearing of which the piece of land faces. Dominantly south-facing slopes can be highlighted in green whilst dominantly north faces slopes in red. When combining this visualisation with solar irradiance and generation availability substation data, we can start honing down to the sites likely to be most attractive to solar developers.

GIS technology is key to identifying potential sites efficiently and effectively

Grid Capacity

As solar schemes were re-introduced it was clear that the aim was to develop in the south of England, however, opportunities have brought the developers further afield as the spare grid capacity in the north is greater than that of the south.

If there is grid capacity on a nearby line it is vital to act quickly as it is likely that there will only be space for one scheme. However, to get the best agreement professional advice should be sought.

Financial Returns

When the previous scheme was thriving the expected rent of such a scheme would probably be in the region of £1,000-£1,200 per acre per year, however, this is a little exaggerated in today’s market.

Having negotiated and dealt with schemes that are currently ongoing the average rental figure is in the region somewhere between £700-£850 per acre per year. Although if your site fits the bill then an additional payment may be sought linking it to the site revenue – not all developers will appreciate such an approach.

If you compare this to the current rent of arable land at approximately £120 p/ac. However, it is not all as it seems, the ‘Big T’.

Tax implications 

When renting land for a solar scheme this does not qualify as agricultural use, although it is appreciated that you could still graze livestock on the land simultaneously. The primary income from the land will be the solar scheme not the livestock therefore non-agricultural use takes precedence.

The big drawback of solar schemes is the impact on Inheritance Tax. Under the Inheritance Tax Act 1984 Section 160, ‘assets should be valued at open market value at the date of death.’ The level of revenue which is generated by the solar scheme may significantly increase the value of the land underneath.

The land will be let on a commercial lease and therefore the previous benefit of Agricultural Property Relief may no longer exist. Albeit the likelihood of benefitting from Business Property Relief may still stand – however legal and accountancy advice should be taken on this before entering any agreement. The tax cases of Balfour v Brander (2010) and Farmer v Inland Revenue Commissioners did in fact establish that Business Property Relief could be available if the rental income is not the main activity on the farm but is ancillary to the farm business.

The area is complex and professional advice is advised to ensure your plan is in place before the sunset!

If you would like to discuss any of the information further or think your farm/land may be of some interest and to explore the options please contact Danielle Galvin on 07876 860640 or click here to send an email.

Open for business – focused on the future

Without a doubt the Covid-19 pandemic has shaped the immediate future on a global scale. At George F. White we are firmly focussed on the future, embracing the opportunities that arise from change and providing our clients with exceptional service. We are seeing increased activity across all of our services and are here to help.

Our priority is to ensure the safety and wellbeing of our clients and colleagues therefore following recent government announcements we at this time continue to keep our offices closed to the general public, however, the business remains to be fully operational with minimal staffing across our offices with the majority of our team working remotely from home.

We have fully embraced technology and can provide assistance across our full range of services.

Further to this we have in line with government guidance developed our George F. White C-19 three-point policy to ensure that we can conduct our business in a safe manner for both our clients and colleagues and our team can meet and help our clients to embrace opportunities under this guidance.

We are open for business, focused on the future.

 

Robyn Peat
Managing Partner

Geographic Information Systems

If you are a business, which is spread across multiple sites or has an interest in understanding or expanding its geographical reach, then chances are you should be using Geographic Information Systems (GIS).

GIS has been around for a long time, but we are only just beginning to fully realise its applications for businesses, particularly those operating in property, mining, engineering, logistics, and the environment.

James Brett, GIS Mapping Manager at George F. White chartered surveyors and property consultants says: “GIS is gaining momentum in terms of public awareness as people are starting to clock on to the value it can provide.”

GIS can be understood as a kind of digital footprint for documenting and visualising information geographically. “The fundamentals of GIS are to manipulate, create and analyse spatial data”, adds James. Google Earth is a form of GIS in its simplest form, in that it allows you to add markers, lines and shapes, populate tables and visualise dense geographic data on a map. But the capabilities of Google Earth are fairly narrow compared to a GIS platform that’s developed specifically to do spatial analyses of almost any kind. GIS allows you to visualise all of your data with geographical context and there are numerous reasons why you might want to do this.

Maybe you are a property investor and you need to keep tabs on your portfolio or a supermarket targeting demand by using demographic data for a new site. You might be a landowner involved in a legal dispute over the boundaries of your ownership or a leisure operator trying to find a new site to build on. You could even be a government agency trying to plan new flood defences or a mountain rescue service trying to map avalanche risk.

GIS can be applied to make a real impact on all of these different scenarios. James adds: “If I were to summarise what GIS does brilliantly, it is facilitating more educated decision-making.” The site finding and property management aspects of GIS are where George F. White has a real strength, not just regionally but nationally as well.

James explains: “One of the largest projects that I’ve worked on was to help a national mining company find a new resource of rock to extract from the ground. They were looking for some 20 million tonnes of a particular rock type and we used GIS to visualise the relevant geological data and omit geographical areas that lie within areas of outstanding natural beauty or national parks, essentially places where you can’t dig. “We were basically identifying which areas of land have the best opportunity of ascertaining planning permission to extract millions of tonnes of rock from.” If you are looking for a new site to develop or extract resources from, then you need as much spatial information about the surrounding area as possible before making a decision.

GIS is also useful in property management for those companies who have hundreds/thousands of properties across vast distances because it allows them to visualise where they are on an interactive map and filter the data themselves based on things like when lease agreements might be up for renewal on the properties. James continues: “If you have 200 properties in your portfolio, then you want to visualise the service charge cost, return on investment, EPC ratings which can introduce an economy of scale by helping you decide which properties to renovate based on proximity.”

One of George F. White’s new clients that will benefit from this function is Teesside International Airport. “The objective with the airport is to take the property management portfolio and organise it,” James explains. “We’re going to be visualising all the tenure information, defining clearly all the legal boundaries and inputting all the landlord data, the tenant data, any legal documents and ultimately host and present these layers on an interactive map for the client to access.”

On the national scale, the big players in spatial data, from the Land Registry to the Environment Agency, are beginning to release more of their data to the public which is allowing GIS experts to formulate geographic layers to support business operations.

The Environment Agency have made LiDAR data available for any member of the public to download. GIS specialists are using LiDAR data to create accurate 3D models of the ground to help perform hydraulic modelling for flood analysis to figure out where best to place a dam or divert a river or build better flood defences. Given that climate change will increase both the frequency and severity of flooding in the UK, this function will be incredibly important in the future. “I think GIS has a pretty fundamental part to play in preventing future flooding,” James maintains.

Although the applications of GIS in the property sector are vast, not many firms have a dedicated and experienced team or a GIS service that they can shout about, which is what sets George F. White apart. From site finding to hydraulic modelling, GIS is facilitating better decision-making in a variety of sectors. Chances are there’s a problem in your business, which GIS could help solve.

If you would like to discuss GIS further and in particular how it might help your organisation please contact James Brett on 01665 511983 or click here to email.

Businesses Urged To Combat Energy Price Hikes

With energy prices becoming increasingly volatile, businesses across the regions are being urged to consider onsite energy and heat generation to save money, while also protecting natural resources.

Andrew Rollo, Head of Energy at George F. White, said: “Subsidies are reducing while energy costs are rising. The government FIT scheme for wind turbines is currently fully subscribed and grants for technologies such as solar have been greatly reduced over the past three to four years. This has dramatically reduced the attractiveness of projects which create and export energy.”

energy

“At the same time, purchasing energy is more expensive than ever for businesses across all sectors. Onsite generation can create power for as little as 3p per kWh, which is why looking into generating your own power or heat is an essential element in forward planning for businesses.”

There are several technologies that can protect businesses against the volatility of the energy market, including ground source heat pump systems which provide good returns for those firms currently using fossil fuels to provide heat for processes, working environments and storage spaces. There are other initiatives that help shift consumption away from peak periods such as the emerging battery storage market and Demand Side Response Scheme. These are available at zero capital cost; the investment being made by a third party with benefits being shared between developer and consumer. When businesses generate their own power, they can effectively fix their energy cost for up to 25 years, which not only creates huge savings but also enables effective long term financial planning.

Andrew added: “We work independently with a wide range of businesses that consume large amounts of energy or heat, helping them to identify and deliver sustainable energy initiatives that will benefit their bottom line. We perform feasibility studies which enable clients to understand the specific benefits of the project and any associated risks before embarking on a particular energy project. Once an initiative is under way, we work closely with the client, offering a turn-key service to take the project from initial feasibility to final commissioning. On completion of the project, we can then manage the asset appropriately to optimise efficiency and ensure its profitability and longevity.”

To find out more about alternative energy initiatives and how and why they can work for your business, please contact Andrew Rollo on andrewrollo@georgefwhite.co.uk  or 07545 920905.

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