The government plans to cut tax reliefs for community energy schemes to build new renewable power capacity such as solar and wind in a move that will deal a further blow to the UK’s embattled renewables sector, green campaigners have warned.
The Treasury is to remove tax reliefs of 30% or more for community energy schemes that reduced the risk for investors and encouraged private capital to help build new energy capacity.
The move, which emerged this week during the finance bill’s third reading, had not been expected. It means that investors in community energy projects will not be able to benefit from the so-called Enterprise Investment Schemes, the Seed Enterprise Investment Scheme or the Social Investment Tax Relief, making such investments much less attractive. It comes on top of previous subsidy cuts and proposals by the government to cut subsidies for domestic solar installations – so called feed-in tariffs – by 87%.
Jan-Willem Bode, the managing director of Mongoose Energy, one of the largest green energy groups in the UK, said: “Many [shareholders] feel like pulling the plug right now because it is just too much negativity thrown at the sector.”