Published: 23 Nov 2022, 12:44
The new windfall tax on electricity generators will not impact Atrato Onsite Energy, the company has announced.
Unveiled within the Autumn Statement, the Electricity Generator Levy is a 45% tax on “extraordinary returns from low-carbon UK electricity generation.”
It is set to cover aggregate revenue that generators make above £75/MWh. Generators whose in-scope generation output exceeds 100GWh annually will be subject to the levy, which will apply only when extraordinary revenues exceed £10 million.
There is an amount of uncertainty over how significantly it will impact the solar sector directly, given the need for clarification over whether will be applied to assets covered by the legacy Feed-in-Tariff subsidy or power purchase agreements. Assets covered by the Contracts for Difference scheme will be excluded from the levy.
Solar Energy UK hit out at the tax this week due to the impact it is likely to have on investment into the solar sector, in particular during a period when power prices are at record highs due to the gas market.
Based on the available information currently, Atrato – which specialises in UK commercial onsite solar – does not expect to be affected by the windfall tax.
“The company’s focus on long-term highly contracted solar PV systems results in a low sensitivity to wholesale power prices. Based on the current portfolio and pipeline, the Levy is not expected to impact the company’s target returns or net asset value,” it stated.
Other companies have also been evaluating the impact of the new tax, with Bluefield Solar Income Fund for example estimating that its audited NAV would have decreased by 3 pence per ordinary share as a result of the levy.
The windfall tax has been introduced to help fund support mechanisms for household bills amidst the wider energy crisis, such as the Energy Price Guarantee.
Earlier this year, Atrato highlighted that the high power prices were driving significant interest in its rooftop PV solutions from commercial customers, themselves looking to protect themselves from the high prices by becoming more self-sufficient for energy. This includes companies like Nissan, the car manufacturer that Atrato is developing a 20MWp solar project for.