Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how solar feed-in tariff projects and the pre-determined revenue streams they deliver will be considered under the Electricity Generator Levy.
From January 2023, a 45 per cent tax will be levied on extraordinary returns being realised from non-carbon electricity generators, including solar generators, in the UK. The measure will raise around £14.2 billion over the scorecard and help fund support for households and businesses with their energy bills as well as vital public services.
The levy will only be applied to a measure of extraordinary returns defined as returns from selling electricity for a period at an average price of more than £75/MWh. This is approximately 1.5 times the average price of electricity over the last decade. The Government considers this to be a proportionate approach to recovering a proportion of the extraordinary profits electricity generators are receiving whilst leaving them with a sufficient level of return to incentivise investment required to transition to net zero.
The levy will be limited, through a de minimis threshold, to those groups generating more than 100 Gigawatt-hours per annum of electricity from in scope generation assets in a qualifying period and will only be applied on extraordinary profits in excess of £10m for the group. This means smaller generators will not be within scope of the levy.