Farmers and rural firms with solar PV installations have been warned to beware of hidden business rates charges.

“Although a lot of farming businesses may fall into the category of being agriculturally exempt, others won’t, so it’s important to get your array expertly and independently checked to find out if you have a business rates obligation,” explained Richard Palmer of energy consultants Roadnight Taylor. “Modelling business rate implications for solar installations at different scales and configurations can inform the feasibility of a project and mitigate your liability.”

Farms using more than 90% of the generated electricity on-site will fall under the agricultural exemption, as long as the electricity is being utilised for agricultural purposes only, but Mr Palmer noted that 'bizarrely' the worst hit farms are those using between 50% and 90%.

Complexities around temporary micro-generation exemptions can lead to farmers mistakenly concluding that they are not liable for business rates: “For example, a farming tenant with an existing array of 120kWp who wanted to add a further 30kWp would have inadvertently lost his agricultural exemption as he would now be consuming less than 90% of the generated energy on site," he explained. "However, we advised a solution whereby the landlord invested in the second array to sell the electricity to the tenant. This avoided a potentially significant business rates liability.”

Many farms and estates have diversified their businesses and created downstream supply chains such as farm shops and food processing ­– and in these cases, existing or adding solar PV, or battery storage, could make a business liable for rates.

“The key message here is to get good advice,” added Mr Palmer. “Working with an independent specialist that not only understands the policy issues and nuances – but also has the technical, data-science and commercial expertise associated with deploying solar – can help a business insulate its existing solar assets from business rates impacts, and can make an informed decision on new investments.”