Rooftop Solar Business Rates set to Rise
The Valuation Office Agency (VOA) has announced changes to business rates for solar PV systems and these new rates are set to come in to force in April 2017. The Solar Trade Association estimates that some businesses could face increases of up to 800% if their rooftop solar PV system provides renewable energy to their own properties.
Despite efforts to secure a governmental U-turn, it is likely that the new rates will come in to action.
What are the changes?
Business rates for solar PV systems are currently calculated at a rateable value of £8/kW regardless of the application (i.e. self-consumption or export), with systems sized below 50kW being exempt. The new rates however will look to differentiate systems based on the use of the energy and systems below 50kW will also be subject to business rates. Two valuation methodologies are proposed:
1. Mainly Export
This is where the solar asset has been set up to export the energy generated to a third-party via a Power Purchase Agreement and a Special Purpose Vehicle (for example solar farms).
2. Mainly Self-Consumption
The is where the owner of the system uses the majority of the energy generated for self-consumption.
The concern regarding the new business rate is focused on those that fall under the second valuation bracket, as the valuations are estimated to rise between 6 to 8 times.
Who will be affected by the new rates?
Any business or organisation that has a solar PV system that supplies the majority of the energy generated for self-consumption could be impacted. Examples include:
Schools
Community Buildings
Local Authority Buildings
Small Businesses
Investment funds with existing leases
Asset Managers
Hospitals
How can we help?
Wilson Fearnall can provide advice to help you understand the new business rates and how they will impact your system. Services include:
Review of existing asset and structure – sale or re-finance
Estimation of new business rates
Advice on setting up a new Special Purpose Vehicle
Advice on setting up a Power Purchase Agreement
Related posts
The introduction of the revised Electronic Communications Code was supposed to dramatically improve the situation created by its poorly conceived predecessor. Almost 12 months in and despite the opportunity
Outdated and inconsistent planning policy and guidance combined with strong local opposition have seen most of the applications for exploratory fracking sites, currently decided by local mineral planning bodies,
The Government released the new National Planning Policy Framework (NPPF) on the 24th July 2018. Six years on from the first publication of the NPPF, a tougher test on deliverability and the
On 28thDecember 2017 the new Electronic Communications Code came into effect. This revised legislation has been designed to support the rollout of a robust and sustainable telecommunications network throughout
As well as the delay to the start of Civils works on Phase 1, it is now widely reported that the DFT will announce to parliament the planned submission
Following the adoption of the Local Plan Strategy last year, the council is preparing a number of additional planning policy documents. These are being consulted on between 11 September
