Small Scottish renewable energy schemes could be faced with new business rates increasing three-fold, claims industry lobbyists
The Scottish Government issued a draft budget for 2017-18 in December last year, which included legally-defined rateable value revaluations for non-domestic Scottish buildings. Businesses pay rates based on a proportion of that value, which is set by Scottish Ministers as the “poundage” to better reflect the property market. The poundage is currently set at 47.1p per pound of rateable value.
The changes come into effect in April 2017 and revaluations from the Scottish Assessors Association released last month could see bills on renewables sites reach a quarter of a firm’s annual turnover.
Figures released by Scottish Renewables reveal that hydro schemes such as the 500kW Buckny Hydro in Perthshire could be hit with a rise from £32,000 to £93,000 under the revaluation.
Scottish Renewables policy manager Hannah Smith 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.”
Alba Energy – which represents independent hydro producers in Scotland – has also criticised the proposed rates, claiming the hydropower has been singled-out.
Alba Energy’s chairman Martin Foster said: “We are not seeking special treatment. We want to know why we have been singled out for special punishment. Hydro is the original renewable energy source: the cleanest, most efficient, least obtrusive, and longest-lasting. Yet the Scottish Government has facilitated a rates regime that will cripple the independent hydro industry it once claimed to support – while leaving the big energy companies unaffected.”
The Government announced in 2012 that the next revaluation would be postponed to this year. The launch of the new revaluation has caused concern for Scottish Renewables, and other industry bodies, that the new costs could lead to dented investor confidence or even closures on certain sites because of overnight changes.
The Scottish Government previously introduced a relief scheme to assist renewables generators, but the support ended in 2015 and no replacement initiative has been introduced to ease concerns. A fixed £100m budget was agreed for Feed-in-Tariffs on new spends from January 2016 across the UK, but this looks set to run out in April 2019.