Business rate tax increase likely to hit commercial solar PV


The economic viability of commercial rooftop solar installations could be severely damaged next year under plans to increase business rates taxes by up to eight times the current levels following a re-evaluation of how these assets are valued.

Following weeks of discussion with HM Revenue and Customs’ Valuation Office Agency (VOA), the Solar Trade Association (STA) has revealed that a wider review of business rates is set to retroactively hike up the tax associated with existing installations, as well as those planned for the future.

The VOA review, which happens every five to seven years, applies a specific methodology to calculating the rateable value for solar PV. This is then multiplied by a factor of 0.4 to gain the amount the company has to pay each year.

Despite solar PV seeing both costs and subsidies drop significantly over the past five years, the STA has said the rateable value is only being based on capital costs of installation as of 1 April 2015. It has estimated that this is due to increase from £8kWp to anywhere between £48.40-61.60kWp.

This means a company currently paying around £320 for a 100kW system could see its tax rise to almost £2,500 for the same installation, severely damaging the economic viability of commercial rooftop solar.

Source: Solar Power Portal 

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