North West solar-powered businesses could be in for a roasting
Any North West businesses out there that have rooftop solar installations could see a huge hike in their business rates following the Revaluation next year.
North West of the Pennines is not traditionally renowned for its annual record-breaking hours of sunshine, however, there are still many businesses out there which have made that green leap and invested in solar technology to keep their emissions and energy bills down.
Noble as that may be, The Solar Trade Association is now warning without some form of Government intervention, business rates on commercial rooftop solar installations are set to rise by between six and eight times, as from April 1 2017, as part of the wider Business Rates’ Revaluation process.
The STA believes the Rateable Value could now be calculated using the contractor’s basis method – classifying installations as the same as other machinery owned by a business.
The move would cause a rate jump from the current cost of £8 per kW to between £43 and £61 per kW, depending on the installation size. In practice, the change could mean a business with a 100kW solar system that now pays around £350 per year in business rates see their bill rise to £2,600.
The fear is that the huge increase in the running costs of a rooftop solar installation will affect both existing and new projects and in some cases would actually send installations into negative returns i.e. businesses would be spending more on the system in tax and maintenance than getting back from the sale of the power and the Feed-in Tariff support.
The rate hike doesn’t affect domestic rooftop solar systems or solar farms but businesses with self-owned property, schools, community buildings and other public authorities.
This seems to be a wholesale change in the methodology that is having a huge impact on one particular sector – possibly unforeseen and more an accidental by-product that could severely affect these energy-conscious businesses and the solar powered industry per se.
The STA is currently working with various Government departments to see if they can push through their proposal to exempt self-owned rooftop solar from business rates altogether. The planned changes are set to be published in draft form on September 30. If finalised, would come into effect on April 1 2017.
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