Could the angry debacle surrounding the changes of tax rules for solar PV installations be a taste of future renewable energy taxes to come?
The changes by an obscure quango, the Valuation Office Agency (VAO) will push up business rates on solar PV installs . Argument around the issue has to-ed and fro-ed for months, but it’s now clear that some (if not all) PV installations – including schools – will soon have an increased tax rate – sometimes by up to 8 times – to deal with.
Make no mistake: the introduction of this kind of stealth tax on renewable energy is to be expected.
This is because the conventional brake on renewable development – cuts to Feed in Tariffs (FITs) – has been worn out. FIT rates have fallen so low that reducing them no longer make very much difference.
So it would make sense that new brakes be developed.
And this is what explains the otherwise incomprehensible increase in business rates. It comes from the same determination that is fixed on controlling renewable energy growth.
Spain introduced a ‘Sun Tax’ in 2013: the law banned community ownership and forced generators to give their electricity away for free. The text reads “Senora, you’ve used renewable energy for five hours, that’s seven Euros. And 50 centimes for doing it topless”
It may be prudent to expect more of this in future. Perhaps we will see something like Spain’s notorious ‘sun tax’, which required renewable generators to give their electricity away for free, prohibited community ownership and put a tax on any energy used in the home. The scheme was hatched by Energy and Tourism Minister José Manuel Soria, who later resigned after being linked to the Panama Papers scandal.
Who knows what sort of solar ring-fencing is being developed in brain-storming sessions by those in Whitehall currently plotting the departure from the EU?
But one thing is clear: solar is moving from an environment in which subsidies are reduced, to one in which taxes are imposed.
This is because there is a class of bureaucrat who has long been entranced by what you might call ‘Big Engineering’ (BE) – the vast fossil fuel projects required to build the North Sea oil fields, for example, or that might build thousands of fracking rigs across the country.
Renewable industries do not develop like this: they are much more like a real market. Unlike the corporatocracy of BE, renewables are diffuse, diverse and relatively ‘flat’ (i.e without the tendency to oligarchy that BE so clearly manifests). As such the pesky swarm of renewable energies that constantly chips away at BE’s market share must be dealt with. And since BE has friends in government – indeed, it is often the government itself – taxation is the most recent weapon selected.
But the future of our planet depends upon an energy switch away from the industries of BE, and vapid attempts to stifle renewable growth – the fact growth in other countries makes renewables inevitable underlines the idiocy of this behaviour– are simply not good enough.