Solar Panelling

PotentialEnergy

Hi
I own a second property that is let. I am being a nice landlord and funding central heating as the gas wall heaters are about kaput now. They're 30yrs old. Obviously that is a capital investment and I have to retain the record to add to my property purchase costs.
I'm considering looking into solar panelling for the property to get Feed-in-Tariff earnings albeit I expect it to be unviable. Some things I am bearing in mind is
1/ FiT payments to me will be deemed as taxable income whereas the ones on my main residence are tax-free.
2/ The tenants get the free electricity but I can't claim anything for it unless I haggle to put their rent up.

What I am unsure about is whether I can offset the costs of installation of the solar panelling as a cost of the property when I come to sell it or is it a business cost I can charge against rental income? Arguably, it is benefitting its value now but if looking at things at the opposite end of the timespan, it may be felt in 20yrs time that the investment is virtually worthless . Only earning free electricity whilst needing an inverter and to be maintained isn't a great sell but equally a boiler will be run down by then!

If I have to have the inverter or panelling replaced/repaired, is that an on-going business charge or something to stack as a capital cost? Or, is it a case of a further downside risk to its viability? Important to cost it in. :eek: If the boiler breaks down and needs repairing I can charge that against the business so why not with the solar panelling?

Please advise your thoughts on these
Thanks

laticsforlife

I think that as these are fixed to the building, they are definitely Capital in nature, and a fixed asset. Thus you would add the cost to the cost of the building (I don't see it matters that in 20 years they are not worth the same; that will only affect the sale price).


If they need repairing, then depending on what that is, it may well be revenue in nature, so long as you're not making some improvement to the set-up (like maybe adding more, or replacing one type with a newer version perhaps). In that case they become a bit like your boiler scenario.