The delay in business rates increase needs to be longer to encourage the uptake of renewable power generation by companies in England, the company urges.
November 12, 2026
Renewable power supply company Good Energy is calling on the government to extend the Improvement Relief scheme on business rates in England to encourage the installation of renewable energy projects on UK commercial premises.
In England, business rates are based on the value of the property a business occupies, and are paid by the premises' landlord or the business tenant, depending on the agreement between the two. Improvements to the building that increase its value, such as the installation of solar panels, raises the payable rates. But under the business rates Improvement Relief scheme, such an increase is delayed by a year.
Good Energy wants the government to extend the one year relief period. Carl Hogg, managing director of services at Good Energy, said: "The opportunity is particularly compelling for businesses consuming large amounts of electricity during the day, because power generated on the roof can be used directly on site. […] What we need to focus on now are the practical barriers stopping projects from getting off the ground, whether that is the relationship between landlord and tenant, the condition of the roof, finance or difficulties around connecting to the grid."
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The Improvement Relief scheme is due to come to an end in 2029, albeit with a promise from central government to review its effectiveness. One point in the scheme's favour is that the ratepayer does not have to apply for the relief; it is mandatory for the the local authority to grant the relief as long as the criteria for improvements are met.
The argument from the clean energy sector is that the rates relief delays some of the immediate cost to the business or leaseholder of adding hardware such as solar arrays to commercial buildings. By generating power themselves, companies save money on utility costs immediately: Good Energy describes an installation of solar panels it undertook at a BSH distribution warehouse in Corby, England that generates around 550MWh of electricity annually – around three-quarters of the power consumed on site.
However, the complexities of leases on commercial buildings can muddy the picture. Solar PV panels can be classified as 'plant and machinery' under the terms of a lease, rather than property assets that would qualify landlords for specific tax reliefs such as those defined in the Corporation Tax Act 2010. Under the Act, solar installations and the electricity income they generate may not qualify as tax relief-qualifying assets and income – a discouragement to infrastructure investment.
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Additionally, there may be a disparity between lease lengths and the time it takes for the ROI on solar installations to pay out. Issues of insurance liabilities on the part of landlords and business tenants on solar arrays would also need to be agreed by all parties.
A less capital-intensive although more legally complex method of capturing the value of solar installations on commercial property might be entering a PPA with a third-party solar power provider responsible for installation and operation of an array – similar to the trial scheme piloted by the UK government for schools. In that specific instance, Rebecca Cullen of legal firm Browne Jacobson noted, "[The parties] will be largely non-specialist counter-parties in these arrangements, and the terms around tariff review mechanisms, step-in rights, roof condition warranties, and exit provisions will all need to be fair and clearly understood by those signing them."
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Joseph Loe
Contributing writer
Joseph is a freelance journalist with over 30 years' experience of digital publishing in B2B and B2C. His specialisations include the impact of technology on the environment and how the latest tech influences society, business, government policy and the media. When not writing or researching, Joseph can be found running in the countryside of South West England.
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