I have spoken to many people over the last couple of days and explained what the actual announcements mean to the community energy sector. By doing that, I have also been forced to summarise what has actually happened and what the impact of the removal of tax relief for community energy investments actually is.
So what has actually happened?
The previous government (the Coalition) announced a community energy strategy, which laid out various measures supporting the community energy sector. The current government has since announced a string of measures directly impacting the renewables industry, but mentioning or at least very strongly hinting at “carve outs” for community energy, so as to soften the blow for this sector.
But then this week, in the Third Reading of the Finance Bill, the only carve out that is still left, which is the eligibility for entrepreneurs and social investment tax relief, was taken away.
This was despite various communications from government, including in official documents, that community energy projects would remain eligible for tax relief.
No consultation, no discussion, just an announcement that these tax breaks will disappear as from the 30th of November.
This does not only have direct impact on ongoing and planned fund raise but also on the future of the sector as a whole.
Hundreds of millions of investments may now not happen, and tens if not hundreds of millions of community benefits (such as fuel poverty projects) may not happen either.
A big missed opportunity.
By Jan-Willem Bode, Managing Director of Mongoose Energy