Campaigners say the government intends to charge business rates for small solar installations on schools, but academies, private and free schools will be exempt due to charitable status

Many state schools with solar panels are set to be hit with a tax hike, according to government plans, but private schools, free schools and academies will not be affected due to their charitable status.

Campaigners say the move will end the installation of solar energy for most schools.

The government proposes to end an exemption for small solar panel installations (less than 50 kilowatts) and charge business rates on them from April 2017. The charity 10:10 has calculated this will cost schools more than £820 a year for the average 10kW installation and, combined with recent cuts to the subsidy paid for rooftop solar energy, make future projects risky or uneconomic.

As recently as September 2015, schools could expect to pay back the costs of installation in five to eight years, but the new regime would mean payback times of at least 12 years and perhaps never, 10:10 says.

The changes to subsidies, which are estimated to have cost 12,000 jobs nationwide, have already forced 10:10 to close its Solar Schools programme, which had installed more than 2,000 panels on 80 schools since 2011, working with more than 30,000 pupils.

“This new tax hike is just nonsensical,” said Cecily Spelling, at 10:10. “It’s punishing those that have already installed solar and discouraging more in the future. It’s about so much more than just generating energy - it brings communities together and gets people excited about the positive things they can do to tackle climate change.

“It’s also a brilliant resource for science, technology and maths education. It’s so sad that only a very few, select schools will be able to experience this kind of solar-powered magic in the future. It is just so unjust.”

Research conducted for Nesta and Solar Schools found participants felt more engaged in taking action on climate change, with more than 70% changing their behaviour to save energy.

Adam Stanley, assistant headteacher at Liss primary school in Hampshire, said: “The prime reason [for installing solar panels] was the attraction of a clean sustainable form of energy, which sent out a very clear message that we were serious about looking after the environment.”

He said the subsidy cuts have already discouraged other schools from following suit. “The news that the government now intends to increase business rates fills me with despair. Not only will we struggle to break even on our investment, but by the exemption of schools with charitable status you are creating a two tier system which penalises local authority schools. I urge [ministers] to rethink this rash decision.”

Winchester College is among the private schools which recently installed solar energy, adding 500 panels to its rooftops.

Samantha Williams, headteacher of Middleton primary school in Leeds, said: “Installing solar on our roof has been a great thing for the school, the pupils and the community. The changes to the feed-in tariff were bad enough but the new business rates being thrown into the mix too will stop schools in their tracks and punish those around the country who have already done the right thing and installed.”

The proposed change in business rates will also affect many solar installations on commercial buildings larger than the 50kW exemption, hiking up charges by six to eight times, according to the Solar Trade Association (STA). The STA says there are already 23,000 non-domestic rooftop installations that would be affected and is calling on the government to make all self-owned rooftop solar panels exempt from business rates.

A government spokesperson said: “Solar deployment is a UK success story with almost 11GW of capacity now installed, and the government is committed to providing secure, clean and affordable energy now and in the future.”

He said: “Business rates are based on valuations from the independent Valuation Office Agency. We will look closely at the impacts of the forthcoming valuation, and consult on how to put the right support in place for businesses to adjust to any changes.”