More than 160 NGOs, schools, academics, energy providers and public institutions are urging the Chancellor to abolish the proposed rise in solar panel business rates.
Big companies such as Sainsbury’s, IKEA, and Kingfisher PLC – who own B&Q and Screwfix – have joined over 160 diverse groups calling on the Chancellor to drop the solar tax hike. The group, which includes two former directors of Big 6 energy companies, as well as senior politicians, the Federation of Small Businesses, campaigning groups like Greenpeace and Friends of the Earth and senior academics have signed the letter asking the Chancellor to stop the forthcoming rise in business rates for self-consumption solar power.
Changes to business rates paid on solar power could see many systems become uneconomic. The changes will see rates rise up to eight fold for organisations that own solar panels and use the power themselves. This would see the most efficient use of solar, consumption at point of generation, bizarrely penalised by the tax system.
The change will only affect systems where the energy is for self-consumption; companies who export their power to the grid or a third party are rated on a different calculation. This means that the tax rise is most likely to hit smaller companies, who are less likely to have set up different ownership schemes for their panels, as well as public sector organisations such as state schools and hospitals.
Paul Barwell, STA CEO, commented:
“The sheer diversity of groups willing to sign this letter demonstrates the breadth of feeling on this issue. Now that the UK has signed the Paris Agreement it goes without saying that the Government should support organisations seeking to reduce their carbon footprints, not penalise them. It is essential that solar energy is treated sensibly within the tax system.”
In a speech to Energy UK Greg Clark MP, the Secretary of State for Business, Energy, and Industrial Strategy, said he wanted decentralised energy to compete with large-scale new generation because “the competitive tension is best for consumers.” However solar power is being increasingly disadvantaged in the tax regime; for example gas combined heat and power devices have been exempted from business rates since 2001, but not zero carbon solar. This is in addition to tax breaks for fossil fuel extraction such as 100% capital allowances for oil and gas production in the first year, which are not available to solar energy.
The letter reads it is “disappointing that over the past year major policy changes have led to rooftop solar deployment falling by over 80% in the UK. Instead of stabilising the industry, it has been further jeopardised by surprise business rate rises for organisations that own and supply themselves with solar power. Businesses, schools and others with solar face a sharp 6-8 fold tax hike from next April. If this proceeds it will also restrict future investment in solar rooftops all over the UK and put the British solar industry at a disadvantage, both at home and internationally.”
Sir Tim Smit, Co-founder of Eden Project, commented:
“The folly of this measure will be seen unkindly by history. I urge the Chancellor to ensure common sense prevails and creates a business climate that promotes a sustainable, independent, future, demonstrating that Britain remains serious in its ambition to play a part as a global citizen.”
Mike Cherry, National Chairman for the Federation of Small Businesses, said:
“The inclusion of solar panels in the business rates calculation could leave small businesses with a rooftop solar installation facing a huge eight-fold tax hike. For many small firms who may have already been impacted by recent changes to low carbon subsidies, this is an extra financial burden that they will struggle to cope with.”
The letter concludes “New Ministers have described climate change as ‘one of the biggest – if not the biggest – threats to our national and global security’. We agree. It would be extraordinary if the Government penalised businesses and communities for taking positive action. We urge you to stop the solar tax hike.”
Are the UK Governments Plans for the Energy Sector Smart?
The revolution in the energy sector marches on, wind turbines and solar panels are harnessing more renewable energy than ever before – so where is it all leading?
The UK government have recently announced plans to modernise the way we produce, store and use electricity. And, if realised, the plans could be just the thing to bring the energy sector in line with 21st century technology and ideologies.
Central to the plans is an initiative that will see smart meters installed in homes and businesses the length and breadth of the country – and their aim? To create an environment where electricity can be managed more efficiently.
The news has prompted some speculation about how energy suppliers will react and many are predicting a price war. This could benefit consumers of electricity and investors, many of whom may be looking to make a profit by trading energy company shares online using platforms such as Oanda – but the potential for good news doesn’t end there.
Introducing New Technology
The plan, titled Smart Systems and Flexibility is being rolled out in the hope that it will have a positive impact in three core areas.
- To offer consumers greater control by making smart meters available for all homes and businesses by 2020. Energy users will be able to monitor, control and record the amount of energy they use.
- Incentivise energy suppliers to change the manner in which they buy electricity, to offer more smart tariffs and more off-peak periods for energy consumption.
- Introduce new standards for electrical appliances – it is hoped that the new wave of appliances will recognise when electricity is at its cheapest and at its most expensive and respond accordingly.
How the Plans Will Affect Solar Energy
Around 7 million houses in the UK have solar panels and the government say that their plan will benefit them as they will be able to store electricity on batteries. The stored energy can then be used by the household and excess energy can be exported to the national grid – in this instance lower tariffs or even payment for the excess energy will bring down annual costs significantly.
The rate of return on energy exported to the national grid is currently between 6% and 10%, but there are many variables to take into account, such as, the cost of battery storage and light levels. Still, those with state-of-the-art solar electricity systems could end up with an annual profit after selling their excess energy.
The Internet of Things
Much of what the plans set out to achieve are linked to the now ubiquitous “internet of things” – where, for example, appliances and heating systems are connected to the internet in order to make them function more smartly.
Companies like Hive have already made great inroads into this type of technology, but the road that the government plans are heading down, will, potentially, go much further -blockchain technology looms and has already proved to be a game changer in the world of currency.
It has already been suggested that the peer to peer selling of energy and exporting it to the national grid may eventually be done using blockchain technology.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Don and Alex Tapscott, Blockchain Revolution (2016)
The upshot of the government’s plans for the revolution of the energy sector, is that technology will play an indelible role in making it more efficient, more flexible and ultimately more sustainable.
4 Case Studies on the Benefits of Solar Energy
Demand for solar energy is growing at a surprising rate. New figures from SolarPower Europe show that solar energy production has risen 50% since the summer of 2016.
However, many people are still skeptical of the benefits of solar energy.Does it actually make a significant reduction in our carbon footprint? Is it actually cost-effective for the company over the long-run?
A number of case studies have been conducted, which indicate solar energy can be enormously beneficial. Here are some of the most compelling studies on the subject.
1. Boulder Nissan
When you think of companies that leverage solar power, car dealerships probably aren’t the first ones that come to mind. However, Boulder Nissan is highly committed to promoting green energy. They worked with Independent Power Systems to setup a number of solar cells. Here were the results:
- Boulder Nissan has reduced coal generated electricity by 65%.
- They are on track to run on 100% renewable energy within the next 13 years.
- Boulder Nissan reduced CO2 emissions by 416,000 lbs. within the first year after installing their solar panels.
This is one of the most impressive solar energy case studies a small business has published in recent years. It shows that even small companies in rural communities can make a major difference by adapting solar energy.
2. Valley Electric Association
In 2015, the Valley Electric Association (VEA) created an 80-acre solar garden. Before retiring from the legislature, U.S. Senate Minority Leader Harry Reid praised the new project as a way to make the state more energy dependent and reduce our carbon footprint.
“This facility will provide its customers with the opportunity to purchase 100 percent of their electricity from clean energy produced in Nevada,” Reid told reporters with the Pahrump Valley Times. “That’s a step forward for the Silver State, but it also proves that utilities can work with customers to provide clean renewable energy that they demand.”
The solar energy that VEA produced was drastically higher than anyone would have predicted. SolarWorld estimates that the solar garden created 32,680,000 kwh every year, which was enough to power nearly 4,000 homes.
This was a major undertaking for a purple state, which may inspire their peers throughout the Midwest to develop solar gardens of their own. It will reduce dependency on the electric grid, which is a problem for many remote states in the central part of the country.
3. Las Vegas Casinos
A number of Las Vegas casinos have started investing in solar panels over the last couple of years. The Guardian reports that many of these casinos have cut costs considerably. Some of them are even selling the energy back to the grid.
“It’s no accident that we put the array on top of a conference center. This is good business for us,” Cindy Ortega, chief sustainability officer at MGM Resorts told Guardian reporters. “We are looking at leaving the power system, and one of the reasons for that is we can procure more renewable energy on the open market.”
There have been many benefits for casinos using solar energy. They are some of the most energy-intensive institutions in the world, so this has helped them become much more cost-effective. It also helps minimize disruptions to their customers learning online keno strategies in the event of any problems with the electric grid.
4. Boston College
Boston College has been committed to many green initiatives over the years. A group of researchers experimented with solar cells on different parts of the campus to see where they could produce the most electricity. They discovered that the best locationwas at St. Clement’sHall. The solar cells there dramatically. It would also reduce CO2 emissions by 521,702 lbs. a year and be enough to save 10,869 trees.
Boston College is exploring new ways to expand their usage of solar cells. They may be able to invest in more effective solar panels that can generate far more solar energy.
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