Are solar panels exempt from business rates?

It helps to be precise about the mechanism, because "exempt from business rates" is a slightly loose way of putting it. Your property is still rated. What changed is that qualifying renewable generation plant is left out of the valuation, so it does not push up the rateable value your bill is calculated from.

The change was made by The Valuation for Rating (Plant and Machinery) (England) (Amendment) Regulations 2022, SI 2022/405, which came into force on 1 April 2022. It amends the classes of plant and machinery that are taken into account when a property is valued, carving out a category the regulations call "excepted renewables plant and machinery".

This guide is general information. PPA Funding is an independent introducer, not a rating adviser, a surveyor or a tax adviser. Rateable values are set by the Valuation Office Agency and the application to any particular property depends on facts we cannot assess from a distance, so confirm your position with a qualified rating adviser or the VOA before acting on it.

The regulations define excepted renewables plant and machinery as 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 a listed set. That list includes both "photovoltaics" and "solar power" as separate entries, alongside biomass, biofuels, biogas, fuel cells, water including waves and tides, wind, geothermal, and heat from air, water or the ground.

Two details in that definition are worth pulling out. First, solar is named twice over, so there is no question of it being in scope. Second, the definition covers not just generation but the storage, transformation and transmission of power, which is relevant if your project includes battery storage or associated equipment rather than panels alone.

The qualifier "mainly or exclusively" is the one to watch. It ties the treatment to what the plant actually relies on, and it is the kind of wording that turns on the facts of an installation. That is a question for a rating adviser looking at your specific scheme, not something to settle from a guide.

The exemption is not open-ended. The operative wording excepts this plant from valuation "in relation to any day before 1st April 2035". After that date, on the regulations as they currently stand, the carve-out stops applying.

That is a long horizon — more than eight years from now — and it comfortably exceeds the length of a typical commercial solar PPA term. It is still worth knowing about if you are modelling a long asset life, and worth re-checking nearer the time, since a date set in secondary legislation can be extended, amended or allowed to lapse.

The regulations are made for England — the title reads "(England)", and they amend the English plant and machinery valuation regulations. Business rates are devolved, so you cannot read across from this instrument to the rest of the UK.

One point of possible confusion: legislation.gov.uk records the legal extent of SI 2022/405 as "England and Wales". That is the standard formula for the England-and-Wales legal jurisdiction and is not the same as the regulations applying in Wales. The instrument is an England instrument.

Scotland operates its own system of non-domestic rates reliefs rather than this exclusion from valuation. mygov.scot lists a Renewable Energy Generation Relief and a District Heating Relief among the available reliefs, and states that you need to apply to your local council for reliefs. So the route in Scotland is an application to the council, not an automatic carve-out from the valuation. We have not set out the eligibility conditions here because we have not verified them; your council or a Scottish rating adviser can confirm whether a particular scheme qualifies.

For Wales and Northern Ireland, we are not going to guess. We could not verify an equivalent instrument or relief for either during the research for this page, and the honest position is that we do not know rather than that no relief exists. If your site is in Wales or Northern Ireland, treat the England position above as inapplicable and ask a local rating adviser, the Valuation Office Agency in Wales, or Land & Property Services in Northern Ireland.

We would rather tell you what we have not checked than publish a confident sentence that turns out to be wrong. Rates are administered locally and the detail changes, which is exactly why so much of the general content on this topic is out of date.

Under a power purchase agreement the funding partner owns the system for the term rather than the occupier. That difference in ownership is a fact a rating adviser will want to know, because rating questions can turn on who holds and uses equipment and for what purpose.

The England exclusion described above is framed around the plant and what it is used for rather than around who owns it, but we are not going to extrapolate from that to a conclusion about any particular PPA arrangement. Raise it as a specific question when you take rating advice.

When you request a solar proposal, flag business rates as an explicit question so it sits alongside the energy figures rather than surfacing later. In most cases the electricity saving is by a wide margin the larger number, but knowing the rates position removes an unknown before you commit.

If you want certainty, the two places to get it are a qualified rating surveyor and the Valuation Office Agency. A general article — including this one — can tell you which rules exist and where to read them, but only someone looking at your property and your installation can tell you how they apply to it.