Dark cloud for North Devon’s solar farms?
STRUGGLING North Devon farmers trying to survive by planting “crops” of solar panels could be facing an unpleasant shock after it emerged they might have to pay business rates.
The green energy revolution and the Feed-in-Tariff scheme prompted farmers across the region to apply for permission to install rows of photovoltaic solar arrays on their land to power the farm and sell electricity back to the National Grid.
But a local farmer contacted the North Devon Gazette after receiving a letter from North Devon Council seeking information on the new installation so the Government’s Valuation Office Agency can assess whether it is liable for business rates.
Rates could be charged depending on the capacity of the installation and how much power is exported to the grid.
Agricultural land is exempt from business rates and it has come as a shock that solar arrays might generate costs as well as power.
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“Local farmers are struggling to make any money in the economy at the moment anyway,” said the landowner, who did not wish to be named.
“If we can’t make a small amount after what has been a large investment, having to pay rates will push some farmers who had hoped to keep going out of business instead.
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“Our array cost �77,000 and will take a long time to repay as it is – to pay rates on top of that would defeat the object. We get paid four pence per kilowatt hour, something like �300 a year for exporting to the grid.”
Since February 2011 North Devon Council has approved 77 applications for “solar PVs” ranging from 1kw-50kw, including residential, non-residential, ground mounted, roof mounted, schools, farms and public buildings.
Of those, 21 were for 50kw arrays on farm land. The council contacts all owners of recent developments, domestic and non domestic, as part of its obligation to assist the VOA to update the rates lists.
It is up to the VOA to decide whether the owners of solar arrays will have to pay rates, depending upon a variety of things, including whether electricity is used on site or exported.
“When agricultural land is used for a solar photovoltaic array it is no longer primarily used for agricultural purposes and so the agricultural exemption from business rates doesn’t apply,” said a spokesperson.
But they said under 2008 regulations, in practice ratepayers who installed equipment with capacity to provide on site power up to 50kw of electricity would not see any increase in their rates bills until the next five-yearly revaluation. For those installed today, this would be April 1, 2015.