Bemused by Renewable Energy?

Are you bemused by the plethora of Renewable Energy initiatives? Endless acronyms: RHI. FiT, EPC? Multiple technologies: wind, solar, water, air? Should you be investigating all of this and if so, how and through whom? Do you want to get rich or save the world?

Getting these decisions wrong is high risk. Will you get the right turbine? Will you put the solar panels in the right place? Will the grid connection be at the correct voltage? Will the subsidies be sustained? Will the tax breaks continue? Will the stellar returns on investment actually come to fruition when interest rates rise and wind speeds fall?

Instead of investing directly in new technology, it could be that landowners might be better advised to ignore the get-rich-quick route and plan for the long term marketability of their properties, using limited capital resources to best effect for the future.

Landowners need to beware of the looming sanctions which are proposed on renewable policy. The Energy Act 2011is threatening to make it illegal to let thermally inefficient properties after 2018 – only seven years away. It will be difficult for a significant proportion of country dwellings to meet this challenge – single glazing, lack of insulation, stone walls, floors and roofs, non-condensing boilers, all serve to drag down performance. You only need to go into a newly-built or converted building to realise the benefits of modern insulation – the contrast is self evident.

The Government is, however, also trailing its “Green Deal” as an incentive open to all householders to invest in energy-saving measures. In essence, this offers them £6,000 to invest in the property, provided as a loan, to be repaid over 20 years. It is open to all occupiers, but is charged against the property. In theory, the "Golden Rule" is that expenditure should always provide a better return in terms of energy saved, but clearly this may not always be the case.

The landlord is therefore left vulnerable, in that the tenant can spend the money badly, then leaving the landlord with the liability to repay. Landlords may not be able to resist tenants’ applications to go down this route, so they would be well-advised to take the initiative and have a well-thought through policy to deal with the requests when they arise.

Whether or not some or all of these measures actually reach enactment or enforcement, the policy thrust is clear - energy usage needs to be squeezed and when it is, running costs will be reduced.

We believe that prudent landlords should be carrying out an audit of their existing housing stock in order to evaluate the potential works which need to be done. They can then plan ahead for a phased scheme of investment and take best advantage of the incentives available.

Land Factor are working closely with a firm of experienced energy advisors to develop a simple, but comprehensive report for landowners, which will help to manage the way through this potential minefield.

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