Renewable energy generation relief scheme

The Non-Domestic Rates (Renewable Energy Generation Relief) (Scotland) Amendment Regulations 2016 detail a rates relief scheme from 1 April 2016 for renewable energy producers, replacing the scheme in place since 2010.

The scheme offers relief to either: renewable energy generation developments with community involvement; or new build renewable generation property.  District Heating relief for renewables, which had been due to expire on 31 March 2024, has been extended and expanded. 90% relief will be available until 31 March 2027 for district heating networks where at least 80% of the thermal energy generated derives from renewables. Previously support for renewable district heating was limited to new networks entered on the valuation roll after 1 April 2021.

The Renewable Energy Generation Relief Scheme will provide non-domestic rates relief from 1 April 2016, to renewable energy producers who are solely concerned with the production of heat or power (or both) from the following sources: biomass; biofuels; fuel cells; photovoltaics; water (including waves and tides, but excluding production from the pumped storage of water); wind; solar power; geothermal.

The qualifying conditions for the purposes of the scheme is defined as a business owning, leasing or otherwise entitled to occupy one or more business properties in Scotland, solely concerned with the generation of heat or power (or both) from the sources noted above.

A renewable energy generation project is considered to have community involvement if there are arrangements in place which give to a community organisation (s), in return for investment in the project by that organisation (s), entitlement to a sum equivalent to:

1. At least 15% of the annual profit of the project; or
2. So much of the annual profit of the project as is attributable to 1 megawatt of the total installed capacity of the project (or more).

The level of renewable energy generation rate relief available to community involvement schemes depends on the combined rateable value of your business's eligible property (or properties), and is set out in the table below:

New property built between 1 April 2016 and 31 March 2018 used solely for the generation of renewable heat and/or power, and which is not part of a community renewables development, may receive 10% relief if RV is no more than £500,000 and 1.5% if above that figure. Between 1 April 2017 and 31 March 2018 this may be 25% relief if total installed capacity is no more than 1 megawatt.

From 1 April 2018, hydro schemes with a rateable value of no more than £5m, used for the generation of renewable heat and/or power (but excluding production from the pumped storage of water), may be eligible for 60% relief.

Download Renewable Energy Relief Appn Form 2023 (Word doc, 51 KB).
Further information can be obtained from the scheme ndr scotgovt renewable energy scheme policy guidance (PDF, 22 KB).

Subsidy Control

This relief is likely to be considered a subsidy under the Subsidy Control Act 2022 ("the Act") and is listed in the Non-Domestic Rates (Restriction of Relief) (Scotland) Regulations 2023. Public authorities need to consider whether this relief is awarded as Minimal Financial Assistance (MFA), or whether it meets the other subsidy control requirements of the Act. Consequently the application form includes a request for such information as may be required to assist with the determination of any relief award.