Local government finance circular 5/2023: non-domestic rates relief guidance

Renewable energy relief

123. The key legislation is the Non-Domestic Rates (Renewable Energy Generation Relief) (Scotland) Regulations 2010.
124. Eligibility for the Renewable Energy Relief relating to community benefit requires arrangements which give at least 15% of the annual profit to a community organisation, in return for investment (or, failing that, so much of the annual profit as is attributable to 0.5 megawatt of the total installed capacity)[1]. Table 3 shows the sliding scale of applicable relief against the RV of the qualifying properties in Scotland that the applicant occupies or (if vacant) is entitled to occupy.

Table 3: Renewable Energy Relief thresholds[2]

125. Relief is available for subjects 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) (“hydro schemes”)
• wind
• solar power
• geothermal sources

126. In addition, hydro schemes with a RV of no more than £5 million are also eligible for 60% relief.[3] This relief is available until 31 March 2032.[4]
127. This relief is mandatory and 100% funded by the Scottish Government.
128. This relief is likely to be considered a subsidy under the Act and is listed in the Non-Domestic Rates (Restriction of Relief) (Scotland) Regulations 2023. Public authorities should consider whether this relief is awarded as MFA, or whether it meets the other subsidy control requirements of the Act.