By the PPA Funding team Last updated
Commercial solar can affect business rates, because plant and machinery like a solar installation may be considered in a property's rateable value. Treatment has changed over recent years and depends on ownership and use, so the impact varies. Confirm your position with a rating adviser or the Valuation Office before assuming.
How business rates and plant interact
Business rates are based on a property's rateable value, an estimate of its annual rental value set by the Valuation Office Agency (VOA) in England and Wales, with equivalent bodies elsewhere in the UK. Certain plant and machinery fixed to a building can be taken into account in that valuation, and a solar installation is a form of plant.
Whether, and how much, solar affects the rateable value has been the subject of policy changes and reliefs over recent years, particularly to encourage on-site renewable generation. Because the rules have shifted, general articles online can be out of date. The principle to hold onto is that solar can be relevant to rates, so it is worth checking rather than ignoring.
Ownership and how the system is funded
How the system is owned and used can influence the treatment. A system you own outright and use to power your own premises may be treated differently from one owned by a third party under a PPA, or one whose main purpose is exporting to the grid. These distinctions can matter to how the equipment is assessed.
Under a PPA the funding partner owns the equipment for the term, which changes the ownership picture compared with an outright purchase. This is exactly the kind of detail a rating specialist will want to know, because it can affect who, if anyone, sees a rates impact and how any relief applies.
Why to take specific advice
This guide is educational and not rating or tax advice. Business rates are administered locally and the rules on plant, reliefs and renewable generation change, so the only reliable answer for your property comes from a qualified rating adviser or directly from the Valuation Office. Ask them before you assume solar will, or will not, move your bill.
When you request a solar proposal, flag business rates as a question so it can be considered alongside the energy savings. The savings on your electricity bill are usually the far larger number, but understanding any rates effect gives you the full picture before you commit.
This guide is general information, not financial or tax advice. Your circumstances determine what applies — please confirm with your accountant or advisor. Get a tailored proposal →
Frequently asked questions
Will adding solar automatically increase my business rates?
Not automatically. Solar can be relevant to a property's rateable value, but reliefs and the specifics of ownership and use affect whether there is any change. Because the rules have altered over time, confirm the current position with a rating adviser.
Who decides how solar affects my rateable value?
In England and Wales the Valuation Office Agency sets rateable values, with equivalent bodies in Scotland and Northern Ireland. A rating surveyor can advise on your specific property and liaise with them if needed.
Related guides
- Commercial solar for multi-site businesses
- What affects solar panel output?
- VAT on commercial solar explained
See our funding options, commercial solar and solar by industry pages.