News

2010-08-16 : Rising Business Rates Hit Energy Projects

There are fears for the future of green energy schemes in Scotland due to the crippling impact of business rates that have risen up to five times for renewable projects. Experts have warned that specialist firms are struggling to cope with the higher charges, possibly making some projects not viable.

The business rates brought in this year are based on the revaluation carried out by the Valuation Office two years ago. Critics point out that they do not take into consideration the impacts of the recession, as they are based on the higher revenues and lower construction costs at that time.

Business rates for some wind farms have doubled and for hydro schemes they have risen up to five-fold. Many green energy firms are planning to appeal against the charges.

The increases in rates are viewed as a huge blow to Scotland meeting its ambitious climate change targets. Some say there is a real risk that this could undermine the value of the renewable industry to potential investors. In England, a transitional scheme caps the increases at 12.5 per cent, but this was not adopted in Scotland.

The Scottish Governments Renewable Energy Relief Scheme will take smaller developers and community schemes out of the business rates system altogether, but larger developers would see rises that will impact on the business case for investment in more marginal areas and schemes.

Ruddle Merz currently advise several renewable companies on reviewing their business rates. Please call us on 0800 883 0353 for free advice and a business rates review or email us at enquiries@ruddlemerz.co.uk.