Free solar panel discussion

HomeSun_company_representative

slacky555 wrote: »

So why would Eaga specifically say that for my possible install it would be the 200w zen panels? They took all my details and looked at my specific install and answered all the questions I had regarding pitch and shading.

Or is it zen 220 panels you install on the free systems only? But why would Eaga say different.

Hi slacky555,

My response came from a senior manager at EAGA as he was in our offices today. I am not sure which member of EAGA supplied you with that info from thier call centre.

Krish

furndire

energysavingexp wrote: »

i think you might change your mind when you read the contract.

they want all the remaining FIT fee if you buy the panels off them at a later date.
also charge you to remove/replace them if you need to replace any tiles on your roof over the next 26 years.
also charge you for the loss of income from the panels.
its 20 pages long.

That sounds horrendous - I hope you get some legal advice on that contract Sherlock - sounds like Isis are a load of sharks

zeupater

HomeSun_company_representative wrote: »

Hi zeupater,

According to the HMRC site, if we were to sell a solar system only (without installing and commissioning them) then the standard 17.5% VAT rate would apply. (20% VAT from January 2011) – I.e. you go to a shop and purchase panels, you will be charged at the prevailing standard VAT rate.

The reason I mention the reduced rate of 5% is because not only are we supplying you with the panels but we are installing and commissioning them too, as a result the homeowner is generating electricity. Selling a kit on its own and selling a kit plus installing as well as commissioning them are two different cases and for this reason the VAT rates for both cases differ.

If the homeowner would like to buyout after a supplier such as HomeSun supplies, installs and commissions a system on their property, the 5% reduced VAT rate would apply. On the other hand there is no mention on the HMRC site if the 5% reduced rate will or will not change in the future.

Thanks

Krish

Hi Krish

I understand what you are posting, and I understand the requirements which must be met in order to apply reduced rate VAT on solar pv installations ... what must be remembered is that at the time of installation & commissioning the customer IS NOT the homeowner, it IS the 'rent-a-roof' scheme operator who will take the installation onto their accounts as an asset.

If a homeowner makes the decision to purchase the existing asset from the scheme operator, there will not at that time be a contract to supply, install and commission as is required in order to apply the reduced rate. The contract of sale to supply, install and commission is between the installer and the scheme operator, it is likely that both would be part of the same group of companies with the transaction probably being classified as an intercompany sale at the time of installation. The operations side of the business is the customer, VAT will have been due at the point of sale.

At the time of transfer to the homeowner the system will have been pre-owned by the scheme operating company and will already have attracted the necessary VAT payments due at point of sale. The array will not be removed and refitted to the property as part of the asset transfer to the homeowner, therefore you are correct in your statement referenced above ... "Selling a kit on its own and selling a kit plus installing as well as commissioning them are two different cases and for this reason the VAT rates for both cases differ" ... as the kit will be sold as an existing used asset and further installation & commissioning is not required, therefore unless there is special dispensation by HMRC allowing VAT to be charged at the lower rate (currently 5%) the asset transfer should attract the full prevailing VAT rate.

Again, do you have information provided by HMRC to support the position that VAT will be allowed to be charged at the reduced rate for the transfer of an existing company capital asset ?

Regards

Cardew

I wonder how HMRC will view the disposal of assets(the PV system) by the company from a tax liability POV?

furndire

There is something I feel I need to point out,
There is often a part of the sales pitch which says that solar panels produce electric with a very minimum of light. They do, BUT the light often isn't enough to start the inverter which is what converts your electricity from direct to indirect current (I think thats the way round). And if the Inverter isn't working you are not producing electricty.
I hope I'm not teaching grandmother to such eggs here, and apologies if I am.

zeupater

Cardew wrote: »

I wonder how HMRC will view the disposal of assets(the PV system) by the company from a tax liability POV?

Hi

That's exactly the point .... if they find that they are selling the asset and invoicing the value plus the reduced rate tax (~5% ?) then they find that their own tax liability is standard rate (~20% ?) I'd guess that there would be a rapid change of stance. If charging the reduced rate is an error, it will be rectified for all further sales, there might also be an attempt to recover the correct tax retrospectively.

No matter what has been assumed by both the scheme operator and relayed to the homeowner, unless there is HMRC clarification available on this particular issue I would personally expect the VAT to be chargeable at the standard rate.

Z

Cardew

zeupater wrote: »

Hi

That's exactly the point .... if they find that they are selling the asset and invoicing the value plus the reduced rate tax (~5% ?) then they find that their own tax liability is standard rate (~20% ?) I'd guess that there would be a rapid change of stance. If charging the reduced rate is an error, it will be rectified for all further sales, there might also be an attempt to recover the correct tax retrospectively.

No matter what has been assumed by both the scheme operator and relayed to the homeowner, unless there is HMRC clarification available on this particular issue I would personally expect the VAT to be chargeable at the standard rate.

Z

Sorry, we are at cross-puposes.

I am talking about how HMRC will treat any gain/loss on an asset from the company's standpoint.

Any system they own will have to be given the value it costs the company to procure and fit - not the inflated price that they use for the valuation should the customer decide to buy.

zeupater

Cardew wrote: »

I wonder how HMRC will view the disposal of assets(the PV system) by the company from a tax liability POV?

Hi

Second read, second thought ....

If you were referencing CGT that's an interesting point. The sale wouldn't really be a trading sale of a stocked product as the operator would need to have taken the equipment and installation onto the books as a capital asset (plant & machinery) at cost value (ie, the cost to them). The asset would attract capital allowances as normal, and would need to be depreciated in a normal way because the operator would need to assume that they would not sell the asset within it's lifetime (/contract period).

At the suggested buy-out-price, the asset transfer will be generating a considerable profit, a gain on a capital asset, which should be subject to CGT ...... this shouldn't be a worry to any homeowners, it just reduces the scheme operators' profit after tax.

Z

ps ... Cardew ... read cross post, watching TV, drinking tea & eating muffins at the same time as posting slows me down a little ...

slacky555

furndire wrote: »

There is something I feel I need to point out,
There is often a part of the sales pitch which says that solar panels produce electric with a very minimum of light. They do, BUT the light often isn't enough to start the inverter which is what converts your electricity from direct to indirect current (I think thats the way round). And if the Inverter isn't working you are not producing electricty.
I hope I'm not teaching grandmother to such eggs here, and apologies if I am.

It's a point I would like you to expand on please?

Also a quick question for all those out there with solar panels, at the moment where I am in the midlands the sun/ first light is about 7:45 by 8:00 you can just see the sun (open land) just coming up and say by 8:15 it's probably as bright/sunny as it gets for this time of year but at what point are peoples panels producing anything and how much? And to keep it simple let's assume its a clear day.

Kontiki

This is a website that can predict how much solar power you can generate at your location Performance of Grid-connected PV It is reasonably simple to use, you can select your location from the map, it allows you to put in the direction of your roof & the pitch. The table it produces will show the daily/monthly production also it shows graphs showing things such as the path of the sun in relation to your location. I already posted a couple of other sites in this thread to sites which can give you the payback any system can achieve.

We are in North Wales & had our 3.9 kW system installed mid November, output varies between 0.1 to 6.5 kW. Today it looks like it will be nearer to the 0.1 if we are lucky. Since installation it has done 78.6 kW