The Solar Trade Association has delivered a 200,000+ petition with Greenpeace to the Chancellor asking him to drop the business rate hike for self-consumption of rooftop solar power in today’s Budget (8 March).
Solar is being taxed under Plant and Machinery at levels which do not accurately reflect installation costs today and which do not reflect increased property rental values.
The STA knows of no other sector facing such an extreme rate rise of up to 800%.
Scottish solar power providers are facing similarly huge business rates rises, but are holding their political fire pending clarification of the UK position, which is has an influence on the Scottish Assessors.
The STA has been pressing the Government for over nine months to drop the business rate hike for rooftop solar power, with widespread support including from the Shadow Chancellor, the Federation for Small Businesses and major UK NGOs.
There are around 44,000 microgenerators in the UK who currently pay no business rates on their solar and who face a nasty shock with the rate rise, which could constitute a significant proportion of their overall rate rises.
The rate rises come when rooftop solar deployment is at a near six year low, further threatening the industry.
Meanwhile, large scale solar has been prevented from competing with other technologies for support under the LCF since the abandonment of auctioning for ‘established’ technologies by the Conservative Government, following Manifesto commitments not to support onshore wind.
As a result, all of the cheapest renewables have been cut out of the energy market, increasing the costs of decarbonisation for consumers.
The Treasury will make a statement on the future of the LCF today but it is not known whether this will seek to reform shortcomings in the LCF accounting methodology, or whether it will announce further LCF funds post 2020.
The STA is seeking an early solution that enables solar power – the UK’s most popular energy source – to access the wholesale market again. Solar power was responsible for only 6% of the LCF overspend according to National Audit Office analysis, yet it has borne the brunt of damaging policy changes.
Similarly for VAT – the industry is still awaiting a definitive statement to confirm the domestic solar VAT will remain at 5% and the STA is also seeking clarity on the VAT treatment of storage.