Small-scale renewables projects facing 650% business rates rise

Figures published today by industry body Scottish Renewables have shown that smaller renewable energy schemes are facing increases in business rates of up to 650%.

The group 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.

Hannah Smith, Policy Manager at Scottish Renewables, said: “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.

“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.

“The Scottish Government has big ambitions for small-scale renewables, but these increases in rates will make it even more difficult for smaller hydro, solar and wind projects to go ahead.

“We urgently need the Scottish Government to intervene on this issue to ensure that renewable energy rates are proportionate and affordable and don’t undermine future investment."

A relief scheme which was introduced by the Scottish Government to assist generators ended in 2015 and a replacement has not been introduced, leaving business-owners and operators worried about their future.

Developer GreenPower, which has a 500kW run-of-river hydro project near Kinloch Rannoch, Perthshire, could see its rates bill rise by £24,500 per year, an increase of 154%.

James Simpson, Finance Director of GreenPower, said: “These planned increases will have a devastating impact on our business and its future ambitions.

“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.

“The wider impact to our business will be that we will have to think twice about widening our 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 our supply chain.”

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.

Scottish Renewables’ Ms Smith added:

“As we approach the finalisation of the Scottish Government’s budget we urge Ministers to give due consideration to a scheme to support small-scale commercial solar, wind and hydropower projects, as well as district heating schemes, and safeguard the benefits they bring to Scotland.”

Notes:

Scottish Renewables has produced a position paper on business rates.
Guidance on business rates in Scotland has been published by the Scottish Government.

More information on GreenPower’s Carie hydro scheme in Kinloch Rannoch, Perthshire.