As I have written before, the ESB acquired a site from my father and built a transformer station on it. Because of its location, and the fact that it has spare capacity, I have been approached by 11 separate companies wishing to link the transformer station with a solar development on the land. I had the various offers analysed by an accountancy firm with a lot of experience in the area, and while the exact terms are governed by a confidentiality agreement, the annual rental income is well ahead of any likely return from conventional farming. On that basis, I signed a form entitling my prospective customer to apply for a grid connection to supply solar-generated electricity to “my” transformer station.

Last week, I went in to my tax adviser before signing an option agreement which I was quite prepared to accept was a legally binding step on the way to signing a full lease.

There were a number of issues which my tax advisor and solicitor wanted me to be very clear on. I was not prepared for the clarity of the message.

My tax adviser said he had received a very clear briefing, in response to a Dáil question just that week, that land with solar panels on them would not, for capital acquisitions tax purposes, be treated as agricultural land and, because it was leased, neither would it be treated as a business asset.

As a result, in the event of my transferring the asset either by gift during my lifetime, or by will after it, the inheriting child would receive €310,000 worth of land free of inheritance tax and pay 33% on everything over that. At present, agricultural land values are about €15,000/acre in the area. This would mean just 21 acres could be transferred tax-free. I had envisaged the solar farm to be much more than 21 acres and there is no real guideline on what basis the solar farm land would be valued. Would the rental income mean a much higher land value for capital acquisitions tax purposes?

There are so many potential pitfalls in this whole area that it is with enormous reluctance that I am proposing to defer the project, unless I have legislative certainty.

It may be irritating to note that a similar development in Britain or Sweden would attract no inheritance tax whatsoever if properly structured.

It’s up to the politicians to legislate for change if they wish to have a farm-based renewable energy industry here.

Ideally, I would like the same tax conditions as apply to forestry, but, under the present rules, I will just have to wait and see.