Do Solar Panels on Farm Buildings Affect Business Rates?

Business rates rarely come up when farmers first look at solar panels on farm buildings, and then suddenly matter when an adviser mentions that “the array might be rateable”. The good news is that for the typical farm project — panels on an agricultural building, mostly supplying the farm — two separate rules both point towards no rates bill. The less good news is that an array designed mainly to export is treated differently. This guide sets out the rules for England and Wales, with the sources, so you know which side of the line your project sits on.

This is general guidance on how the rules work, not advice on a specific assessment. Rateable value is set by the valuation officer, and appeals follow their own process.

Rule 1: agricultural buildings are exempt from business rates

Agricultural land and agricultural buildings are exempt from non-domestic rates in England and Wales under Schedule 5 to the Local Government Finance Act 1988. The exemption covers land used as arable, meadow or pasture, market gardens, orchards and similar land, and buildings used solely in connection with agricultural operations on that or other agricultural land. The word that matters is solely: a building used for agriculture qualifies, while a building converted to a farm shop, holiday let, workshop for outside customers or storage for a non-farming business generally does not.

So the first question for any farm solar project is simple: what is the building used for? If it is a working agricultural building, it sits inside the exemption.

Rule 2: renewables plant is excepted from rateable value until 2035

Separately from the agricultural exemption, rating law now excludes most on-site renewable generation equipment from rateable value. The government’s Rating Manual — in its section on power generators, updated on 11 May 2026 — explains that the regulations “except from rateability such P&M where the majority of power generated is consumed within the hereditament”. In England this applies from 1 April 2022 to 1 April 2035; in Wales, from 1 April 2024. Scotland introduced its own equivalent exception from 1 April 2023, also running to 2035.

The practical effect is that solar panels feeding the building they sit on, or the premises they serve, do not add rateable value in their own right while the exception lasts. It is a valuation rule rather than a relief you apply for: the equipment is simply left out of the valuation.

When a farm array becomes rateable: mainly exporting systems

The line is crossed when a system exists mainly to sell electricity. The Rating Manual says that where power “is wholly or mainly for export and greater than 10kW, it will normally constitute a separate hereditament” — that is, a separate rateable unit with its own assessment, distinct from whatever building it sits on.

The manual addresses farms directly. Where a farm owner installs solar panels and the power is mainly exported, it says “rating law suggests that the two separate hereditaments may exist, even if there is only one occupier” — because the farming and the electricity business are different purposes. A rooftop array sized for the farm’s own use and exporting only its surplus is a different proposition from a large array sized to export most of what it makes.

This is one more reason to size a farm array from your half-hourly consumption rather than from the size of the roof. A system designed around self-consumption keeps the business case, and usually the rating position, simple. Our guide to how much a farm roof generates month by month shows how to judge how much of the output a farm can actually use.

What can still be rateable: supports, brackets and settings

Even where the generating plant is excepted, the manual notes that “the supports, brackets and settings” remain rateable items, and that for installations above 50 kW valuations should reflect these residual elements, while below 50 kW the residual value is likely to be de minimis. In practice this matters most for:

• Exporting arrays assessed as a separate hereditament, where the supports and land form part of that assessment.
• Arrays on buildings that are not agricultural — a farm shop, café, holiday accommodation or diversified workshop — which are normally rateable already.

For an array on a building that is itself exempt as an agricultural building, the building’s exemption is the starting point.

Diversified farm businesses

Many farms now run businesses alongside farming, and those buildings are usually rateable. Solar on them follows the general rules: plant excepted where most of the power is used on those premises, separately assessed if the array mainly exports above 10 kW. If you are adding solar to a diversified building that already has a rateable value, check how the valuation will treat the supports and any change to the premises. In England, improvement relief can also delay higher bills for up to 12 months where qualifying works increase a property’s rateable value.

A quick decision guide

1. Is the building used solely for agriculture? If yes, it is exempt under Schedule 5.
2. Will most of the electricity be used on the premises? If yes, the generating plant is excepted from rateable value until 1 April 2035 in England.
3. Is the array over 10 kW and designed mainly to export? If yes, expect it to be treated as a separate hereditament and take professional advice before you commit.
4. Is it a diversified, non-agricultural building? Then the building is normally rateable, and the plant exception applies only where the power is mainly used there.

Sources

• Local Government Finance Act 1988, Schedule 5 (agricultural land and buildings), legislation.gov.uk.
• Rating Manual section 6 part 3, “Power generators” (updated 11 May 2026), gov.uk.
• The Valuation for Rating (Plant and Machinery) (England) (Amendment) Regulations 2022 (S.I. 2022/405), legislation.gov.uk.
• The Valuation for Rating (Plant and Machinery) (Scotland) Amendment Regulations 2023 (S.S.I. 2023/32), legislation.gov.uk.

For the planning, roof and grant side of a farm-building project, see our main farm buildings guide; for current grant status, farm solar grants; and for the wider picture, our independent farm solar guide.