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Wind and solar energy

Renewable Energy Generation Rates Relief: now you see it, now you don’t!

Date: 01/04/2016 | Energy & Natural Resources

The Renewable Energy Generation Rates Relief (“the Relief”), which previously allowed green energy businesses to claw back up to 100% of their business rates is, as of today (1st April), effectively no more. 

And no, unfortunately this isn’t some kind of April Fools’ joke. 

The Relief, established 2010, provided qualifying businesses with reductions of between 2.5% and 100% in their non-domestic property rates. As we have previously reported, all of the applications which we made on behalf of our clients were successful and resulted in those clients making substantial savings on their property rates (amounting to a saving of over £100,000).

Prior to today, occupiers could apply for the Relief provided that their land or premises were occupied solely on the basis of the production of heat or power (or both) from the following sources:

  • Biomass
  • Biofuels
  • Fuel cells
  • Photovoltaics
  • Water
  • Solar Power
  • Geothermal Source

The Scottish Government has now significantly restricted the application of the Relief such that there are now only two scenarios in respect of which it will apply in relation to the production of energy from the sources listed above:

  1. The existing version of the Relief (i.e. where the reductions mentioned above are applicable) will continue to apply only in respect of projects where there are arrangements in place which give community organisations (as defined in the Feed-in Tariffs Order 2012) a return on their investment in such projects of: (a) at least 15% of the annual profit or (b) an amount of the annual profit as is attributable to 1MW of the total installed capacity of the project.
  2. In respect of new qualifying projects (i.e. those which are first entered onto the valuation roll for rates’ purposes on or after 1 April 2016), there will be lesser amount of relief applicable being: (a) a 10% reduction where the value of the relevant land is £500,000 or less and (b) a 1.5% reduction in any other case.

Clearly, the Relief has been substantially restrained and that could have a major impact on a number of businesses whose projects do not fit into either of the new scenarios.

We’ve heard from a number of companies who are only now receiving warning from local authorities of the looming changes to their rates’ position. 

If you’ve had such a letter, and are unsure of your next steps, contact Laura Tainsh on 0131 625 9191 to discuss the potential options.

The matter in this publication is based on our current understanding of the law.  The information provides only an overview of the law in force at the date hereof and has been produced for general information purposes only. Professional advice should always be sought before taking any action in reliance of the information. Accordingly, Davidson Chalmers LLP does not take any responsibility for losses incurred by any person through acting or failing to act on the basis of anything contained in this publication.

Written by

LAURA TAINSH | Davidson Chalmers Stewart
Laura Tainsh

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