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The solar industry is braced for a potential rise in VAT on domestic solar, ahead of a vote by MPs on a Labour amendment to the Finance Bill on Tuesday.
If a VAT rise were to happen, households would be taxed an extra 20 per cent on solar power they have installed, while fossil fuels remain taxed at 5 per cent.
The budget, which was announced last week, was silent about the 20 per cent increase, but the Solar Trade Association (STA) said the decision has been postponed and could be expected before Autumn. The STA is urging the Chancellor to stand up to the European Commission and not go ahead with the “potentially damaging” tax hikes.
STA chief executive Paul Barwell said: “Parliament is right to recognise a serious problem with the government’s treatment of solar power, which had been the major clean energy success story of the last Parliament.
“But government has gone to extremes; slashing support under the Feed in Tariff by 64 per cent for rooftop solar and removing all support for larger projects from this April, leaving much of the industry in limbo.”
The government has budgeted £12 million of support for roof-top solar per year for the next three years under the feed-in-tariffs.
The STA claims it has set out a comprehensive plan for getting rooftop solar off support, only adding a further £1 to household bills by 2019.
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