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Valuations Office Agree Business Rates For ‘Mainly Export’ Solar

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Companies can see how much their properties are valued at on the VOA website[1] as the draft rateable values for 2017 for properties that pay business rates are published today.

Included within the figures published is an unexpected sharp hike in the solar part of business rates for organisations that use power themselves from solar rooftops that they own. The proposed tax hike has caused dismay in the solar industry and across the green economy. MPs from all sides of the House have raised the issue in Parliament. Ministers are waiting until the publication of detailed proposals to form a view.

Due to existing legislation, complex VOA classifications mean that owners of solar panels are split into two classes; those who ‘mainly export’ their power, and those who use the majority of power onsite on the sites which they occupy. The good news is that the STA has signed a Memorandum of Agreement with the VOA [2] following close work on the fair treatment of ‘mainly export’ generators. This means that most solar systems exporting to the grid or via a Power Purchase Agreement to tenants will see a decrease in business rates, reflecting falling costs, and lower rates of subsidy.

However, great concern remains over the treatment of business and some public sector rooftops. Organisations that own their solar panels and use most of the power themselves – a highly efficient option – will see a 6-8 fold increase in the business rates they have previously paid for solar. This threatens to damage the commercial rooftop industry and sting businesses taking action on climate change. It is now up to Ministers to intervene to prevent red tape crippling the rooftop solar industry.

Paul Barwell, CEO of the STA said:

“The good news for ‘export’ solar is that, in most cases, the rateable value will fall from 2017, some by as much as half.

Rates should reflect the true value of the solar asset, as well as the income received.

“As both of these have fallen dramatically over the last 5 years for solar power, the rateable value has also fallen: logic has prevailed. We now need Ministers to act to ensure similarly fair treatment for those supplying themselves with their own rooftop solar.”

The current situation for solar rooftops will lead to perverse outcomes; two identical installations will potentially pay very different rates depending on who owns the solar panels, and how. For example, an organisation that owns and uses its own solar panels will be paying far more than in a scenario where power is generated by a third party through a Power Purchase Agreement or if the installation is set up as a Special Purpose Vehicle (SPV). A similar scenario arose some years ago on Combined Heat and Power (CHP) and the government took legislative action to correct the position. The STA is calling on the government to now take similar action on behalf of the solar industry. The tax hike will hit some schools, but not private schools with charitable status. Further information is available in a briefing by the STA for the industry [3].

The STA has calculated that businesses that use their own onsite power will see a reduction of around 2.5% on their return on investment, damaging project economics. The business rates portion from solar on a typical 100kW installation in this case would rise from £400 per year to £2,700 per year.

Zac Goldsmith MP questioned Treasury Minister Jane Ellison on the tax hike at an Environmental Audit Committee hearing last week while Green MP Caroline Lucas has written to Ministers and is tabling a cross-party Early Day Motion (EDM) as soon as Parliament returns.

Caroline Lucas MP said;

“Hiking business rates for firms which produce their own energy from solar panels is a short-sighted move. Solar is a cheap and efficient way to produce energy, yet this Government is side-lining this hugely popular technology and now risks allowing it to be undermined. This tax hike will punish those businesses which are acting on climate change, and it should be rethought immediately.”

The STA is asking Ministers to table secondary legislation to apply similar exemptions as have been enacted for CHP. The STA is also asking for a permanent exemption from business rates for microgeneration.

Paul Barwell added:

“One of the huge advantages of solar is that it has low operational costs as the sun is a freely available energy source. The estimated £1,000 a year operational and maintenance cost for a typical 100kW system will now be dwarfed by the £2,700 annual rates bill. Legislation needs to correct this anomaly so that all solar installations are treated fairly.’”

The STA is continuing its close dialogue with key stakeholders in DCLG, Treasury and BEIS and has been providing important evidence from asset owners who will be affected by the change in rates and who are reassessing their approach and modelling to investing in solar. Previously microgeneration solar (sites less than 50kW) has been exempt from business rates, but it is not yet confirmed that this will be made permanent in secondary legislation.

Energy

Is Wood Burning Sustainable For Your Home?

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Wood is a classic heat source, whether we think about people gathered around a campfire or wood stoves in old cabins, but is it a sustainable source of heat in modern society? The answer is an ambivalent one. In certain settings, wood heat is an ideal solution, but for the majority of homes, it isn’t especially suitable. So what’s the tipping point?

Wood heat is ideal for small homes on large properties, for individuals who can gather their own wood, and who have modern wood burning ovens. A green approach to wood heat is one of biofuel on the smallest of scales.

Is Biofuel Green?

One of the reasons that wood heat is a source of so much divide in the eco-friendly community is that it’s a renewable resource and renewable has become synonymous with green. What wood heat isn’t, though, is clean or healthy. It lets off a significant amount of carbon and particulates, and trees certainly don’t grow as quickly as it’s consumed for heat.

Of course, wood is a much less harmful source of heat than coal, but for scientists interested in developing green energy sources, it makes more sense to focus on solar and wind power. Why, then, would they invest in improved wood burning technology?

Homegrown Technology

Solar and wind technology are good large-scale energy solutions, but when it comes to small-space heating, wood has its own advantages. First, wood heat is in keeping with the DIY spirit of homesteaders and tiny house enthusiasts. These individuals are more likely to be driven to gather their own wood and live in small spaces that can be effectively heated as such.

Wood heat is also very effective on an individual scale because it requires very little infrastructure. Modern wood stoves made of steel rather than cast iron are built to EPA specifications, and the only additional necessary tools include a quality axe, somewhere to store the wood, and an appropriate covering to keep it dry. And all the wood can come from your own land.

Wood heat is also ideal for people living off the grid or in cold areas prone to frequent power outages, as it’s constantly reliable. Even if the power goes out, you know that you’ll be able to turn up the heat. That’s important if you live somewhere like Maine where the winters can get exceedingly cold. People have even successfully heated a 40’x34’ home with a single stove.

Benefits Of Biomass

The ultimate question regarding wood heat is whether any energy source that’s dangerous on the large scale is acceptable on a smaller one. For now, the best answer is that with a growing population and limited progress towards “pure” green energy, wood should remain a viable option, specifically because it’s used on a limited scale. Biomass heat is even included in the UK’s Renewable Heat Initiative and minor modifications can make it even more sustainable.

Wood stoves, when embraced in conjunction with pellet stoves, geothermal heating, and masonry heaters, all more efficient forms of sustainable heat, should be part of a modern energy strategy. Ultimately, we’re headed in the direction of diversified energy – all of it cleaner – and wood has a place in the big picture, serving small homes and off-the-grid structures, while solar, wind, and other large-scale initiatives fuel our cities.

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Energy

7 Benefits You Should Consider Giving Your Energy Employees

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As an energy startup, you’re always looking to offer the most competitive packages to entice top-tier talent. This can be tough, especially when trying to put something together that’s both affordable but also has perks that employees are after.

After all, this is an incredibly competitive field and one that’s constantly doing what it can to stay ahead. However, that’s why I’m bringing you a few helpful benefits that could be what bolsters you ahead of your competition. Check them out below:

Financial Advising

One benefit commonly overlooked by companies is offering your employees financial advising services, which could help them tremendously in planning for their long-term goals with your firm. This includes anything from budgeting and savings plans to recommendations for credit repair services and investments. Try to take a look at if your energy company could bring on an extra person or two specifically for this role, as it will pay off tremendously regarding retention and employee happiness.

Life Insurance

While often included in a lot of health benefits packages, offering your employees life insurance could be an excellent addition to your current perks. Although seldom used, life insurance is a small sign that shows you care about the life of their family beyond just office hours. Additionally, at such a low cost, this is a pretty simple aspect to add to your packages. Try contacting some brokers or insurance agents to see if you can find a policy that’s right for your firm.

Dedicated Time To Enjoy Their Hobbies

Although something seen more often in startups in Silicon Valley, having dedicated office time for employees to enjoy their passions is something that has shown great results. Whether it be learning the piano or taking on building a video game, having your team spend some time on the things they truly enjoy can translate to increased productivity. Why? Because giving them the ability to better themselves, they’ll in turn bring that to their work as well.

The Ability To Work Remotely

It’s no secret that a lot of employers despise the idea of letting their employees work remotely. However, it’s actually proven to hold some amazing benefits. According to Global Workplace Analytics, 95% of employers that allow their employees to telework reported an increased rate of retention, saving on both turnover and sick days. Depending on the needs of each individual role, this can be a strategy to implement either whenever your team wants or on assigned days. Either way, this is one perk almost everyone will love.

Health Insurance

Even though it’s mandated for companies with over 50 employees, offering health insurance regardless is arguably a benefit well received across the board. In fact, as noted in research compiled by KFF, 28.6% of employers with less than 50 people still offered health care. Why is that the case? Because it shows you care about their well-being, and know that a healthy employee is one that doesn’t have to worry about astronomical medical bills.

Unlimited Time Off

This is a perk that almost no employer offers but should be regarded as something to consider. According to The Washington Post, only 1-2% of companies offer unlimited vacation, which it’s easy to see why. A true “unlimited vacation” program could be a firm’s worse nightmare, with employees skipping out every other week to enjoy themselves. However, with the right model in place that rewards hard work with days off, your employees will absolutely adore this policy.

A Full Pantry

Finally, having a pantry full of food can be one perk that’s not only relatively inexpensive but also adds to the value of the workplace. As noted by USA Today, when surveying employees who had snacks versus those who didn’t, 67% of those who did reported they were “very happy” with their work life. You’d be surprised at how much of a difference this could make, especially when considering the price point. Consider adding a kitchen to your office if you haven’t already, and always keep the snacks and drinks everyone wants fully stocked. Doing so will increase morale tremendously.

Final Thoughts

Compiling a great package for your energy company is going to take some time in looking at what you can afford versus what’s the most you can offer. While it might mean cutting back in other areas, having a workforce that feels like you genuinely want to take care of them can take you far. And with so many different benefits to include in your energy company’s package, which one is your favorite? Comment with your answers below!

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