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Can I charge my tenants for solar generated electricity?

Posted by Chris Rudge on 28 May 2013 at 9:01 am

Q: I have a property which is a farmhouse with attached barn conversion. I live in the barn and I rent out the attached house to tenants. The two properties are on one electric supply and we have PV array on the barn roof with meters in both properties so we can monitor who uses how much electric. We have been charging the tenants per unit slightly over what we have to pay for electric we are charged by our supplier and now the tenants are quoting OFGEM rules that say we can only charge them what we are charged by the company who supplies us. However, as we generate our own electricity during daylight hours we are not getting all of our daytime electricity from our supplier. Please can you advise if we are or are not not allowed to charge more for our electric that we produce ourselves. 

A: It is quite correct that OFGEM have made the ruling that the resale of gas or electricity on a landlord-tenant basis must be at the same cost they paid for it. See below:

"The maximum amount landlords or “resellers” are permitted to charge for gas or electricity is the amount they have paid for it, plus VAT at the appropriate rate. If the existing energy supplier applies a standing charge this can be recovered on pro-rata basis according to the usage of all those supplied at a particular property or site. The Full OFGEM page is here. You can see there is a provision to share the cost of the standing order though, which could be negotiated.

Depending how your Solar PV is connected onto the grid, it will probably be difficult to meter exactly what PV power is being used by the tenants as there will be only a single point of connection to the grid. However, even though you are not easily able to monitor the amout of 'free electricity' your tenants are using, this would not affect your FiT payments and assumed export payments.

It is possible that modifcations to the PV connection to enable metering of how much free PV power is being drawn, but I'm not sure you'd be in a position to charge your tenant for this power. 

About the author: Chris Rudge is a qualified electrician who specialises in renewable energy.

If you have a question about anything in the above blog, please ask it in the comments section below.

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Solar investor alertsComment left on: 8 June 2013 at 9:57 pm

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catchercradle

catchercradleComment left on: 28 May 2013 at 9:45 am

You could take this into account when setting levels of rent however. Easy if with new tennants, otherwise do so at the next anual or whatever review.

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