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Small-scale renewable energy operators in Scotland facing punishing business rates

Figures published last week by industry body Scottish Renewables have shown that smaller renewable energy schemes are facing increases in business rates of up to 650 percent.
Small-scale renewable energy operators in Scotland facing punishing business rates

Scottish Renewables has highlighted significant concern amongst its members and stated that the hikes in bills could threaten future investment in smaller hydro, wind and solar projects. The company is calling for urgent intervention by the Scottish Government on this issue to ensure that renewable energy rates are proportionate and affordable and don’t undermine future investment.

“We acknowledge that business rates are a normal part of any company’s expenditure, but the leap in costs is causing many of our members’ significant concern” said Hannah Smith, Policy Manager at Scottish Renewables. “It is unrealistic to expect a company of any size to absorb increases of this scale overnight, particularly in the context of the likely Feed-in Tariff closure in 2019, which has already made it harder to justify investment in new projects. Projects which are affected are not only contributing to meeting our energy and carbon reduction targets but are also supporting jobs and investment in communities across Scotland.

James Simpson, Finance Director of GreenPower added that the planned increases will have a devastating impact on its business and future ambitions but that the increase in rates will make it even more difficult form smaller hydro, solar and wind projects to go ahead. GreenPower has a 500kW run-of-river hydro project near Kinloch Rannoch, Perthshire, but could see its rates bill rise by £24,500 per year, an increase of 154 percent. The firm had hoped to employ someone to maintain the site over its lifetime, but it can’t make that kind of commitment when so much of its capital will be spent on rates. This means that the company will have to think twice about widening its portfolio and building new hydro schemes and wind farms in Scotland. The knock-on effect of this will be fewer jobs in development, construction and operation and fewer opportunities for those companies within its supply chain.

The Scottish Government has big ambitions for small-scale renewables. However, a relief scheme that it introduced to assist generators ended in 2015 and a replacement has not been introduced, leaving business-owners and operators worried about their future.

 “We had hoped to employ someone to help us maintain the site over its lifetime but we cannot make that kind of commitment when so much of our capital will be spent on rates.

Scottish Renewables has written to Derek Mackay, Secretary for Finance and the Constitution, calling for the Scottish Government to extend its renewable energy rates relief scheme to cover small-scale, commercial renewable energy installations, to provide appropriate relief to district heating schemes and to reconsider its decision not to introduce transitional relief in order to allow the sector to continue to deliver low-carbon energy to consumers.

For additional information:

Scottish Renewables

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