Chancellor George Osborne last week launched a calculated attack on the community energy sector. The move underlies the government’s continuing hostility to renewable energy, and seeks to undermine one of the most popular areas of the industry.
As part of a forthcoming finance bill, Osborne yesterday announced the shut down of EIS tax releif for community schemes.
EIS offers community investors a 30% tax break on the amount they invest.
Anyone interested in joining community energy organisations must now invest before 29th November in order to qualify for EIS. BEC currently has a share offer open – we offer 5% interest in addition to 30% EIS.
Over the last few months the government has executed a well co-ordinated attack upon renewable energy. Yet until recently UK authorities have restrained from singling out community energy. That changed last week.
The chancellor also reversed an earlier position on the tax relief. In last year’s Autumn statement Osborne said that EIS for community schemes would be replaced by a similar tax relief: Social Investment Tax Relief.
As part of the new Finance Bill it emerged that that will now not happen.
The ongoing campaign against renewable energy began in early summer, with the announcement of the end of the ROC scheme (used principally for large-scale renewable energy schemes), and a consultation on ending pre-accreditation. Then came a consultation on changes to the Feed in Tariff scheme – with proposed changes ranging up to 87% cuts.
No doubt the responses to this consultation will be roundly ignored – just has they have been for the consultation pre-accreditation, (read p5 of this, it’s good for a laugh)
This latest move is a strategic manoeuvre against a key political constituency. Coops UK estimates around 20,000 people have investments in Community energy and the wider support base is much larger still.
All these people are strong supporters of renewable energy.
Thus this constituency stands against the Chancellor in his ongoing battle with the ‘green crap’ of renewables and such like.
It’s clever stuff: removing EIS weakens support for renewables in general.
There are now two islands of new projects remaining in the renewable sector. The first is to build renewable energy systems before the FIT cuts before the 1st January. This obviously has a limited shelf life. The second is to build systems that were pre-accredited before the 1st October deadline. BEC has more 4MW of projects to develop under this scheme, and our current share offer is to fund these projects, although that will end in 12 month’s time.
It’s also worth noting that the government have said that they may just call a halt to the whole renewable thing anyway, scrapping FITs if they are unable to control FIT spending in January 2016.
In which case it will be a happy new year for the Chancellor.
