Microgeneration Legislation

The Department is intending to make new subordinate legislation over the next few months in relation to Microgeneration Plant and Equipment.

The legislation will provide that plant and machinery complying with a new statutory definition of microgeneration capacity, is not assessed for rates in accordance with the current valuation list.  I attach, for your information, at Annex 1, the definition we intend to use within legislation. This is essentially a harmonising measure with similar legislation already enacted within GB and is not an NI initiative.

The background to the policy change dates back to the budget in March 2008 when the Chancellor announced a range of measures to promote sustainable growth. Included in the measures announced for England was one relating to occupiers of commercial premises who install carbon saving microgeneration equipment such as solar panels, wind turbines, and ground source heat pumps. The installation of such equipment in business premises can trigger an increased liability for business rates.

In GB legislation has been implemented to provide that businesses will no longer be liable for any potential increase in rateable value attributable to such equipment and plant value for the duration of the Valuation List.

In Northern Ireland, this policy is likely to have little impact on business generally. The value of microgeneration equipment is not separately assessed in the valuations of the overwhelming majority of rateable properties.  Despite this, it is considered appropriate to follow GB policy on this issue. Indeed, NI rating policy is to harmonise with the business rates system in GB, particularly so in relation to valuation and technical matters around the treatment of rateable plant and machinery.

The legislation will make some straightforward amendments to a Schedule within the longstanding principal Rating legislation, the Rates (Northern Ireland) Order 1977. It is hoped that the relevant Statutory Rule will be made in the Assembly in the autumn.

If you have any comments you would like to make on this change to the legislation, I would be happy to hear from you. It would be appreciated if you could respond by 15 September 2009.

Microgeneration capacity means the capacity of plant or machinery to generate electricity or to produce heat where –

(a) in generating electricity or as the case may be producing heat, the plant or machinery relies wholly or mainly on the following sources of energy or technology;

(b) the capacity of the plant or machinery to generate electricity or as the case may be to produce heat does not exceed the capacity of –