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Tax hike warning for rooftop solar installations

06 July 2016

Commercial rooftop solar installations will see a business rate increase of between six and eight times next April, the Solar Trade Association (STA) has announced.

This is included within the re-evaluation of business rates conducted by the Valuation Office Agency, which looks at how assets are valued, income generated and how costs have evolved over the last five to seven years.

The STA is accordingly urging government ministers to intervene to protect investments.

Its chief executive officer Paul Barwel said the "huge increase" in costs will impact on "both existing and new projects".

"In some cases, it would actually send installations into negative returns: you would be spending more on the system in tax and maintenance than you would be getting back from the sale of the power and the Feed-in Tariff support."

Mr Barwell urged ministers to intervene "as soon as possible. The system needs to recognise that solar is a unique technology with both costs and revenues having come down over the last five years.

"This has created a complete mis-fit with the business rates system that needs to be fixed, or else we will face a prohibitive tax hike in this sector."

The STA said that the next round of rateable values bear little relation to the revenue generated by the installations due to being based on fixed assumptions about capital costs of installation.

The mis-fit has been caused by falling levels of both costs and subsidies, says the STA.

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