Council
31 July, 2025
Horsham council calls for overhaul of energy rate scheme
The Horsham Rural City Council voted unanimously to call for changes to the Payment in Lieu of Rates (PILOR) Scheme, which, if approved, would allow energy storage systems to pay lower rates than local businesses.
With the rapid expansion of renewable energy projects, including the State Electricity Commission's (SEC) Horsham Energy Park, Council believes it's time for a fairer system that benefits the community.
Using the SEC's $370 million Horsham Energy Park project, which is a 119 MW solar farm and a 100 MW, 200 MWh battery, is a compelling example of a local project.
Standard industrial rates on the site would be $1,417,479, but the current rate of PILOR would be $389,849, less than a quarter, with a Community Benefit Fund of $70,000.
The council agenda stated that this comparison "underscores the urgent need for an overhaul of the rates paid by energy facilities."
Chief executive Gail Gatt said it was a "significant matter" for the community and region.
"Council is committed to advocating for the best community benefit outcomes from all Energy projects," she said.
"We believe the best community outcome is for Energy Storage projects to be rated the same as for industrial land: that is, the rate should be the industrial rate for the capital improved value of the land.
"This would provide certainty for council and developers and be consistent with rates for other industrial uses for other local businesses.
"It ensures there is an equitable contribution to assist the council in delivering services for its community.
"That's why we are calling for an overhaul of the rates paid by energy facilities, as this is not how it currently happens."
The Department of Energy, Environment and Climate Action (DEECA) is seeking feedback on proposed amendments to the PILOR Scheme, which enables energy projects and electricity generators to negotiate payments to councils instead of paying property rates.
The HRCC asserted that the discounted rates for energy projects are unfair to local businesses.
As a key municipality hosting renewable energy projects, the HRCC is committed to ensuring that these projects deliver real benefits to local communities.
The increasing number of energy storage systems, such as large-scale batteries, presents an opportunity for local economic and community growth, but the current PILOR framework fails to capitalise on this opportunity.
The council advocated for energy storage systems to be charged the same rates as other industrial facilities.
This would ensure that local communities share in the benefits of the renewable energy transition, including better funding for services and infrastructure.
Mayor Ian Ross believed a "full overhaul" was needed.
"These projects should pay their fair share, just like any other business," he said.
"The current system gives them huge discounts, leaving local businesses to pick up the slack. It's time for a fairer deal.
"We are subsidising Melbourne with our infrastructure with very little in return."
The HRCC is calling for a consistent rating approach where energy storage systems are taxed based on the industrial value of the land they occupy.
This would provide certainty for developers while ensuring communities benefit more from these large-scale energy projects.
These facilities occupy vast amounts of land and play a significant role in the state's energy infrastructure.
"They should be treated the same as any other industrial development and pay rates based on the capital improved value of the land," Cr Ross said.
"The renewable energy industry is growing rapidly, and its importance to our future energy needs cannot be overstated.
"However, this growth mustn't come at the expense of the communities hosting these projects.
"The State must revise the PILOR framework to ensure energy projects contribute fairly to the local economy and community."
As HRCC continues to engage with DEECA and other stakeholders, it is hopeful that these changes will lead to a fairer, more transparent system that supports both industry and local communities.
The mayor also said it is time for a strong push for mining companies to pay rates, too.
"Our communities need a fairer and more equitable system," Cr Ross said.
"As do our councils."
