Atrato confirms windfall tax will not affect it as solar companies work to assess impact

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Published: 23 November 2022, 12:44

Atrato has developed an asset pipeline of 496 MW. Image: Scott Webb (Unsplash).

The new one-off electricity generator tax will not affect Atrato Onsite Energy, the company said.

Unveiled in the fall statement, the Tax on electricity generators is a 45% tax on “extraordinary returns from low-carbon electricity generation in the UK”.

It is intended to cover aggregate revenues that generators make above £75/MWh. Generators whose in-scope generation output exceeds 100 GWh per year will be subject to the tax, which will only apply where the extraordinary income exceeds £10 million.

There is some uncertainty about its direct impact on the solar sector, given the need to clarify whether it will be applied to assets covered by the former feed-in tariff subsidy or power purchase agreements. Assets covered by the contracts for difference regime will be excluded from the levy.

Solar Energy UK tackled the tax this week because of the impact it is likely to have on investments in the solar sector, especially during a period when electricity prices are at record highs due to the gas market.

Based on currently available information, Atrato – which specializes in on-site commercial solar power in the UK – does not expect to be affected by the windfall tax.

“The company’s focus on highly contracted, long-term solar PV systems translates into low sensitivity to wholesale electricity prices. Based on the current portfolio and pipeline, the tax is not expected to impact target returns or the company’s net asset value,” he said.

Other companies have also assessed the impact of the new tax, Bluefield Solar Income Fund for for example estimate that its audited net asset value would have decreased by 3 pence per ordinary share as a result of the drawdown.

The windfall tax was introduced to help fund mechanisms to support household bills in the context of the wider energy crisis, such as energy price guarantees.

Earlier this year, Atrato pointed out that high electricity prices are attracting considerable interest in its rooftop photovoltaic solutions with commercial customers, themselves seeking to protect themselves from high prices by becoming more energy self-sufficient. This includes companies like Nissan, the automaker that Atrato develops 20MWp solar project for.

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