Last week’s Spring budget was meant to be a pretty low key affair, with the main show being saved for the Autumn statement. However, for those companies and organisations operating in the solar energy space….it was anything but.
The new hike in business rates on buildings with solar panel installations #solartaxhike is not a new concept and indeed the Solar Trade Association (STA) has been campaigning against this increase since the summer of 2016. In December 2016 more than 160 NGOs, public institutions and businesses came out in support of solar and urged Philip Hammond to intervene over a planned rise in business rates for commercial solar systems to come into force on 1st April 2017.
The Spring budget provided an ideal platform to address these concerns but unfortunately nothing was offered beyond the confirmation that the STA had received that the rate rise would only apply to organisations that owned the panels and consumed the electricity themselves.
So effectively this means that within a few weeks changes to the rateable value (the perceived value that businesses pay tax on) will mean the annual tax bill for those organisations will increase between 6 – 8 times.
What this tax hike essentially means is that for those council run schools who have been early adopters, keen to embrace a cleaner, greener and more sustainable energy source and if they own their own solar panels and consume the electricity, then they now face being negatively impacted through the solar tax hike.
How can schools continue to access solar?
For council run schools still in the process of weighing up the pros and cons of installing solar electricity then the path forward is relatively clear. As the legislation currently stands, the only viable option is to work with a third-party provider who will own the panels and the school simply pays for the electricity consumed.
Third party organisations such as Solar for Schools Community Benefits Society can provide schools with free solar panels on the basis that the school will agree to provide the roof space and buy the clean, renewable electricity from the panels for the next 20 years.
See how Solar for Schools are working with schools in England and Wales.
To find out how investors are making it possible for solar power to be installed in more schools click here.
Will other solar investments be affected?
Given the complexity of the legislation outlined above and the various exemptions that have been provided it can be difficult to ascertain which solar investments will or will not be affected by the #solartaxhike.
If you are a solar investor and/or a member of a community benefit society (CBS) then it's likely that the organisation you invested with has already communicated with you about whether these changes affect your investments. Remember - the tax hike only affects systems where the energy is for self-consumption.
However, if you are unsure then do get in touch with them to find out more. Also to get involved then you can do the following:
- Show your support for solar energy by signing the Greenpeace petition to reverse the #solartaxhike
- If you are a member of a CBS then ensure they are working with trade associations such as the Solar Trade Association to keep them exempt from the #solartaxhike
- Support other renewable energy campaigns such as 10:10’s Blown Away campaign to ensure the UK government prioritises investment in clean energy and stops propping up the oil and gas sector
If after having spoken to the organisation you are invested with you still have concerns, then please get in touch.