UK Solar rate hike could add GBP 1.8 million to schools tax bill

Photo: Simmo Simpson/Defence Images

Seventy-four education authorities across England and Wales responded to a freedom of information request placed by Jenny Jones, a U.K. Green Party member of the House of Lords. Those who responded were responsible for 821 schools, with around 14 MW of solar capacity installed.

If the results are scaled up to include all of the 174 education authorities in England and Wales, it would suggest a total business rates bill of GBP 1.8 million per year resulting from the removal of tax exemptions for solar installations.

The changes proposed by the Valuation Office Agency (VoA), a Government body concerned with council and non-domestic tax rates for England and Wales, should feature in tomorrow’s Spring Budget announcement, and if confirmed would come into force in the next financial year.

Figures published in September 2016 by the UK Solar Trade Association (STA) suggest that rates to be charged to commercial installations such as those on school rooftops are expected to be GBP 55-61/kWh, an increase of at least 600%.

“It’s utterly absurd to penalize schools for investing in solar panels,” commented Jones on her own research. “Schools obviously face bigger financial challenges than this, but the business rate charges will stop any plans for more solar panels. The Government should ditch these plans to charge rates on small solar installations and support more schools to join the clean energy revolution.”

Another recent freedom of information request placed by Korean firm LG Electronics found that a large portion of local authorities in the U.K. cited lack of Government support as the main barrier to further investment in solar.

The VoA’s planned increase to the business rates for solar installations are strongly opposed within the broader industry as well. “We haven’t come across any other sector facing a 600-800% rate rise,” Leonie Greene of the STA told pv magazine. “It is difficult to see any justification for this. Following the Paris Agreement on climate change, this does not give businesses the right investment signal at all.”