UK: Big brands sign letter urging government to stop solar tax hike

A controversial proposal to increase 6-8 fold the rates paid for solar panels at commercial scale has been challenged by a sizable group of big brand companies, energy providers, schools, NGOs and public institutions.

A letter sent to British Chancellor Philip Hammond garnered more than 160 signatories, including solar-friendly companies such as IKEA, Sainsbury’s and Kingfisher PLC, as well as two former directors of Big 6 energy companies, a handful of senior politicians and campaign groups such as Greenpeace and Friends of the Earth.

The letter asks Hammond to reconsider introducing changes to the tax relationship on solar panels bought and used for non-residential rooftop arrays. These proposals would increase the business rates paid for organizations that self-consume solar, rising by as much as eight-fold.

The signatories argue that such a change to the tax system would further penalize a sector of the U.K. solar market that holds relative promise, making uneconomic commercial and industrial (C&I) installations for businesses and NGOs that want to produce and consume their own solar power. The rate increase will not apply to those customers that export their power to the grid or a third party. This, the letter argues, further punishes smaller companies that are less likely to have set up different ownership schemes for their panels. Schools and hospitals are also more likely to be unfairly impacted.

The pace of solar installation in the U.K. has tailed off sharply in the last 12 months as severe cuts to subsidy have taken effect. And despite Secretary of State for Business, Energy and Industrial Strategy Greg Clark recently stating that the government wants decentralized energy to compete with large-scale new generation to bring “competitive tension” to the market, tangible support for solar appears to be found wanting.

"It is disappointing that over the past year major policy changes have led to rooftop solar deployment falling by over 80% in the U.K.," read the letter. "Instead of stabilizing the industry, it has been further jeopardized by surprise business rate rises for organizations that own and supply themselves with solar power. Businesses, schools and others with solar face a sharp 6-8 tax hike from next April. If this proceeds it will also restrict future investment in solar rooftops all over the U.K., and put the British solar industry at a disadvantage, both at home and internationally."

The CEO of the U.K.’s Solar Trade Association (STA) Paul Barwell was heartened by the sheer diversity of groups willing to sign the letter, stating that it demonstrated the breadth of feeling on this issue. "Now that the U.K. has signed the Paris Agreement it goes without saying that the government should support organizations seeking to reduce their carbon footprints, not penalize them," said Barwell. "It is essential that solar energy is treated sensibly within the tax system."

Sir Tim Smit, the co-founder of Eden Project, warned that the decision to press ahead with the proposals would be seen unkindly by history. "I urge the chancellor to ensure common sense prevails and creates a business climate that promotes a sustainable, independent future," he said.

The letter concludes: "New Ministers have described climate change as ‘one of the biggest – if not the biggest – threats to our national and global security’. We agree. It would be extraordinary if the Government penalised businesses and communities for taking positive action. We urge you to stop the solar tax hike."