Could this surprise tax change mean lights out for schools’ solar panels?

We’ve done our maths homework and it looks like our Solar Schools - along with others all over the country who’ve got solar panels - could be facing surprise tax bills of next spring.

Back in July, the Solar Trade Association discovered the government wanted to hike up business rates for rooftop solar. It used to be the case that small solar installations (i.e. less than 200 panels) didn’t have to pay business rate taxes on them. But they will in the future.

People with more panels already pay business rates, but they could see their bills raised up to six to eight times!

We looked into how this might affect Solar Schools. The average amount of solar our schools install is a ten kilowatt rig (around 40-50 panels). We worked out they could be landed with huge tax bills meaning they won’t be able to make their money back from the solar panels for ten years or more.

The Solar Trade Association are campaigning for ministers to stop this happening. You can write to your MP and ask them to support extending the exemption for small rigs like our schools, so they can continue to reap the benefits of solar, bill free!

These new bills come on top of the devastating solar cuts last summer which meant 12,000 jobs in UK solar industry lost and the closure of our amazing Solar Schools programme (sob).

There are very few options available for schools who want to go solar now. Some installers think they can make it happen but others are less positive. Despite some positive thoughts, it's undeniable that external funding has all but dried up and only the most perfect, large, south-facing roofs make sense financially.

This new tax will mostly hit state schools - private schools, free schools and academies are exempt thanks to their charitable status.

We asked some of the Solar Schools what they thought. Unsurprisingly, they weren’t too impressed.

Richard and Karen Ecclestone, Governors, Ludwell Primary School, Wiltshire said:

"Ludwell Primary school has already generated over 9,200 kWh of clean, green electricity and saved 5,200 kg of CO2 thanks to their panels, installed in September 2015. It's been an exciting success story that we should be celebrating.

However, to our despair, we’ve learned there is the threat of a massive hike in the business rates for our Local Authority school, just because we have done the right thing by investing in renewable technology. This technology is insulating us against future price hikes and allowing us to boost our budget - something we know government isn’t going to offer anytime soon.

With the feed-in tariff changes dampening schools options for installing solar already, we can assume that this anomaly is surely not the Government’s intention and urge immediate action to exempt Local Authority schools from this punitive tax."

 

Samantha Williams, Headteacher, Middleton Primary School, Leeds:

"Installing solar on our roof has been a great thing for the school, the pupils and the community. We're sad to see that schools across the country may not be able to follow in our footsteps. The changes to the feed-in tariff were bad enough but the new business rates being thrown into the mix too will stop schools in their tracks and punish those around the country who have already done the right thing and installed."

 

Fiona Byrne, teacher, St Luke’s Primary School, Brighton:

"Our school community of teachers, parents and children decided to install solar panels because it made financial sense. Without the finances stacking up we wouldn't have gone ahead with our plans. We're all extremely proud of our a solar panels at St Luke's Primary School in Brighton and feel we've done our bit to help our environment.

On top of this, the money saved is going to fund many exciting possibilities in our school that we couldn't afford otherwise due to constant budget cuts. The thought that this money will be drastically reduced by an increase in business rates will disappoint hundreds of children in our school and directly reduce future opportunities, for us and for state schools around the country. We need a permanent exemption, why should we suffer whilst academies and private schools continue to reap the benefits?"

 

Adam Stanley, assistant headteacher, Liss Primary School, Hampshire:

"My school was attracted to the idea of solar panels for many reasons. The prime reason was for the attraction of a clean sustainable form of energy, which sent out a very clear message to the public that we were serious about looking after the environment. We were also attracted by the very generous subsidy. Since this has been cut, it has meant that other schools have been put off from following our example, which I feel is a real shame considering how much the government 'talks up' the need for looking after the environment.

The news that the government now intends to increase business rates fills me with despair. Not only will we struggle to break even on our investment, but by the exemption of schools with charitable status (free schools and academies) you are creating a two tier system which penalises local authority schools. I urge you to rethink this rash decision and to change policy so that schools trying to access a clean form of energy are given suitable encouragement.

Schools who’ve gone solar are leading the way to a cleaner, low-carbon future. They don’t deserve a hefty tax bill for it. Write to your MP asking them to exempt solar schools from this tax hike."