Do Solar Panels Increase Business Rates?

Will solar panels increase my business rates?

Business rates are based on a property's rateable value, set by the valuation office (GOV.UK). Some plant and machinery is assumed to be part of the property and adds to that value. Since 2022 in England, 2023 in Scotland and 2024 in Wales, regulations have taken renewable generation and storage equipment out of that assumption until 2035.

The English regulations, for example, except "plant and machinery used or intended to be used for the generation, storage, transformation or transmission of power where the sources of energy or technologies relied upon are mainly or exclusively" renewable, listing photovoltaics and solar power, "in relation to any day before 1st April 2035" (SI 2022/405). The Scottish and Welsh regulations use the same wording (SSI 2023/32, WSI 2023/1229). A Welsh council's guidance gives rooftop solar panels as an example, and says the Valuation Office Agency implements the exemption (Denbighshire County Council).

England, Wales, Scotland and Northern Ireland

Sources: England, Scotland, Wales and the Department of Finance's practice note for Northern Ireland. The NI note says "any plant and machinery used for the generation of electricity, which has an installed capacity of 50kW or less, is not rateable", and that where power is mainly or exclusively for self-consumption the plant is valued with the property, giving "a factory with rooftop solar panels for self-consumption" as the example.

What the exemption covers, and what it doesn't

• Covered. Plant and machinery for generating, storing, transforming or transmitting power from mainly or exclusively renewable sources: panels, inverters and, per the Scottish note, storage batteries and static transformers
• Also covered. Equipment for electric vehicle charging points, under a separate exception in the same regulations
• Not changed. The land, buildings and structures are valued as before
• Different. Sites set up mainly to export, such as solar farms, are valued in their own way; ask a rating surveyor first
• Time-limited. The exceptions apply to days before 1 April 2035

The Scottish regulations' explanatory note puts the purpose plainly: plant and machinery on a non-domestic property used for renewable power "is not relevant for valuation purposes", and "this includes storage batteries and static transformers" (SSI 2023/32).

Scotland's community renewables relief

Separately, Scotland has a Renewable Energy Generation Relief. mygov.scot says you may get 100% off non-domestic rates if your scheme entitles one or more community organisations to at least 15% of the annual profit, and that you apply to your local council (mygov.scot). It is aimed at community schemes rather than a business's own rooftop. Our page on solar support in Scotland covers the rest.

Where rates fit in your sums

Because rooftop solar for your own use is outside the valuation in Great Britain until 2035, rates should not eat into the savings in the period most payback calculations cover. The taxes that do matter are VAT and income or corporation tax: see VAT on solar panels and capital allowances, then payback.