Operators of many small scale green energy projects such as hydro or solar schemes, fear they won't be able to survive proposed business rates increases of up to 650 per cent.

They claim that while Scottish ministers rightly criticised the UK Government for cutting subsidies to renewable energy developments, they are effectively now doing the same, by overseeing rates increases of up to 50 per cent of turnover when support has been removed.

The Scottish Government stresses that business valuations are undertaken by independent assessors. But the point at issue is that a relief scheme introduced by the Edinburgh administration to assist green generators ended in 2015 and has not been a replaced.

According to Alba Energy, a collective of independent hydro operators in Scotland, an average hydro scheme such as the 500kW Buckny Hydro in Perthshire has seen its draft valuation rise from £32,000 to £93,000, a sum that represents 29 per cent of its overall turnover.

The worst hit schemes have seen increases up to seven times their original value, with rateable valuations of up to 50 per cent of turnover.

The 1.9MW Ederline scheme on the banks of Loch Awe in Argyll had a previous valuation of £98,000, now revised upwards to £405,000.

Martin Foster, Chairman of Alba Energy, said:“We are not seeking special treatment. We want to know why we have been singled out for special punishment. Hydro is the original renewable energy source: the cleanest, most efficient, least obtrusive and longest-lasting. Yet the Scottish Government has facilitated a rates regime that will cripple the independent hydro industry it once claimed to support, while leaving the big energy companies unaffected."

Industry body Scottish Renewables also published figures underlining the threat . One of its members Developer GreenPower, which has a 500kW run-of-river hydro project near Kinloch Rannoch, Perthshire, could see its rates bill rise by £24,500 per year, an increase of 154 per cent.

James Simpson, Finance Director of GreenPower, said: “These planned increases will have a devastating impact on our business and its future ambitions."

Hannah Smith, Policy Manager at Scottish Renewables, said: “ “It is unrealistic to expect a company of any size to absorb increases of this scale overnight, particularly in the context of the likely Feed-in Tariff closure in 2019, which has already made it harder to justify investment in new projects.

“Projects which are affected are not only contributing to meeting our energy and carbon reduction targets but are also supporting jobs and investment in communities across Scotland. The Scottish Government has big ambitions for small-scale renewables, but these increases in rates will make it even more difficult for smaller hydro, solar and wind projects to go ahead."

Scottish Renewables has written to Derek Mackay, Cabinet Secretary for Finance and the Constitution, calling on him to help.

But A Scottish Government spokeswoman said:

“Rating valuation of business properties is undertaken by independent assessors, Individual business rate payers can appeal their valuation via independent processes if they feel it is incorrect. Each council retains all the business rates revenue it collects, and it is for councils to apply rates reductions, on top of statutory reliefs, as they see fit.

“The Scottish Government announced a package of action to reduce business rates as part of the draft budget presented to Parliament by Finance Secretary, Derek Mackay. We have also committed to expand renewables relief, and have been engaging the sector ahead of confirming detail shortly."

“Our recently published draft Energy Strategy outlines an ambitious vision for a modern, low carbon Scotland. Hydropower generation makes a valuable contribution to Scotland’s renewables targets and it will have an important role to play in meeting our target to deliver the equivalent of 50 per cent of the energy required for Scotland’s heat, transport and electricity needs from renewable sources by 2030.”