Business rates for small scale hydro, solar and wind projects in Scotland have soared by as much as 650 per cent.

The development of small-scale renewable schemes in Scotland is being threatened by crippling hikes in business rates.

This could have knock on impacts on ambitious renewable energy targets north of the border, trade body Scottish Renewables has warned.

Figures published yesterday (9 February) by Scottish Renewables show that smaller hydro, solar and wind schemes face increases in business rates of up to 650 per cent.

The increase is the result of a wider revaluation of business rates announced by the Scottish government last December.

Alba Energy, which represents hydro groups, said that following the hike, rates bills could make up more than a quarter of its members’ firms annual turnover.

As an example of the average impact, Alba cited the 500kW Buckny Hydro in Perthshire, which has seen its draft valuation rise from £32,000 to £93,000, a sum that represents 29 per cent of its overall turnover.

The hike is the second rates blow to hit small scale renewable in Scotland in recent years. In 2015 Holyrood also withdrew a relief scheme to assist green generators. No replacement relief scheme has yet been announced.

Scottish Renewable has warned that the hikes in bills could threaten future investment in smaller hydro, wind and solar projects.

The group has written to Derek Mackay, secretary for finance and the constitution, calling for an extension of the Scottish government’s renewable energy rates relief scheme.

It has urged Holyrood to reconsider its decision not to introduce transitional relief.

Hannah Smith, policy manager at Scottish Renewables, said the leap in rats bills has sparked “significant concern” amongst her member companies.

“It is unrealistic to expect a company of any size to absorb increases of this scale overnight, particularly in the context of the likely feed-in tariff closure in 2019, which has already made it harder to justify investment in new projects.

“The Scottish government has big ambitions for small-scale renewables, but these increases in rates will make it even more difficult for smaller hydro, solar and wind projects to go ahead.“

Martin Foster, chairman of Alba Energy, said: “We are not seeking special treatment. We want to know why we have been singled out for special punishment. Hydro is the original renewable energy source: the cleanest, most efficient, least obtrusive and longest-lasting. “Yet the Scottish Government has facilitated a rates regime that will cripple the independent hydro industry it once claimed to support – while leaving the big energy companies unaffected.” 

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