Business rate changes should not be a disincentive for solar, says STA

Any changes to business rates should not be a disincentive for solar and there is an argument to draw a distinction between utility-scale and rooftop solar generation, the Solar Trade Association has said.

In a formal response to the Treasury under the current review of business rates, STA head of policy Mike Landy has called upon the government to tread carefully with regards to any changes to the way in which business rates are calculated with regards to solar installations.

Central to the STA’s response is the solar industry’s need for stability, stating that the sector needs fairness, predictability and transparency, and that getting the balance right with regards to taxation is “crucial”.

“The government must aim to keep the taxation burden low to encourage business to risk the significant up-front investment. Until grid parity is reached government must ensure that any taxation is compensated by the level of subsidy on offer –a delicate balance to achieve,” the response states.

And the STA has also raised the argument that a distinction needs to be drawn between utility-scale solar installations, whose entire business case is built around exporting energy to the National Grid, and rooftop solar projects, which primarily act as energy-saving installations for individual businesses.

The trade body has proposed that only the share of electricity which is exported to the grid be liable for business rates, stating there to be “no specific evidence” that solar installations are being reflected on a property’s sales value.

“In particular we recognise that the commercial rooftop sector is a specific government priority for olar deployment and it would be unfortunate if business rates were to be a disincentive to uptake in that sector,” Landy said.

The STA also said it welcomed the fact that all business rates income from new renewable energy project is payable to the local authority rather than central government. The STA said this acts as an additional incentive for local authorities to welcome solar projects in their area and said it should continue continue.

The consultation on the business rates review ran between 16 March and 12 June this year, and the Treasury is now analysing feedback it received ahead of a report expected prior to the 2016 Budget announcement.