Scottish renewable energy chiefs and UK Big Business call on No. 11 to cut solar tax hike

IKEA - one of the solar power supporters
IKEA – one of the solar power supporters

Household British business brands and companies such as Sainsbury’s, IKEA, and Kingfisher – which owns B&Q and Screwfix – have joined over 160 diverse groups calling on the Chancellor to drop the solar tax hike.

The group, which includes two former directors of Big Six energy companies, as well as senior politicians, the Federation of Small Businesses, and senior executives from Scottish renewable energy companies have signed the letter today asking the Chancellor to stop the forthcoming rise in business rates for self-consumption solar power.

Changes to business rates paid on solar power could see many systems become uneconomic. The changes will see rates rise up to eight fold for organisations that own solar panels and use the power themselves. This would see the most efficient use of solar, consumption at point of generation, bizarrely penalised by the tax system.

The change will only affect systems where the energy is for self-consumption; companies who export their power to the grid or a third party are rated on a different calculation.

This means that the tax rise is most likely to hit smaller companies, who are less likely to have set up different ownership schemes for their panels, as well as public sector organisations such as state schools and hospitals.

Paul Barwell, Chief Executive, Solar Trade Association, commented: The sheer diversity of groups willing to sign this letter demonstrates the breadth of feeling on this issue.

“Now that the UK has signed the Paris Agreement it goes without saying that the Government should support organisations seeking to reduce their carbon footprints, not penalise them. It is essential that solar energy is treated sensibly within the tax system.

“Greg Clark MP, the Secretary of State for Business, Energy, and Industrial Strategy, recently said he wanted decentralised energy to compete with large-scale new generation because “the competitive tension is best for consumers.”

“However solar power is being increasingly disadvantaged in the tax regime; for example gas combined heat and power devices have been exempted from business rates since 2001, but not zero carbon solar. This is in addition to tax breaks for fossil fuel extraction such as 100% capital allowances for oil and gas production in the first year, which are not available to solar energy.”

Mike Cherry, National Chairman for the UK Federation of Small Businesses, added: The inclusion of solar panels in the business rates calculation could leave small businesses with a rooftop solar installation facing a huge eight-fold tax hike. 

“For many small firms who may have already been impacted by recent changes to low carbon subsidies, this is an extra financial burden that they will struggle to cope with.”

Other signatories include: –

Ian Marchant, CEO, Dunelm Energy (and Chairman, Wood Group plc)

Martin Wright, Chairman, Renewable Energy Association

Nick Emery, CEO, Fred Olsen Ltd

Gillian Drakeford, Country Retail Manager, IKEA UK and Ireland

Dr Tadhg O’Donovan, Director of Scottish Institute for Solar Energy Research, Heriot-Watt University

John Turner, Director, Celtic Renewable Energy Ltd

Graham Provest, Managing Director, Absolute Solar & Wind

Dan Grandage, Head of Responsible Property Investment, Aberdeen Asset Management plc

Paul Crewe, Head of Sustainability, Sainsbury’s plc

Mary Creagh MP, Chair of the Environmental Audit Committee

Lawrence Slade, CEO, Energy UK

Jeremy Parsons, Head of Energy & Renewables, Kingfisher plc


Full details of the business rates changes can be found here:

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