Solar farm sites which claim Renewable Obligation Certificates (ROCs) will no longer be able to benefit from Enterprise Investment Scheme (EIS).
The Treasury has confirmed in the Budget 2014 document that companies benefitting from ROCs and/or the Renewable Heat Incentive (RHI) will not be eligible for EIS when the Finance Bill 2014 gains royal assent in July 2014.
The move from the Treasury follows on from the decision to exclude companies benefitting from solar feed-in tariffs from EIS back in April 2012. EIS exclusion means that private investors will not be able to receive a range of tax breaks that had facilitated increased investment in solar developments.
However, industry insiders had widely anticipated the move. Responding to the news, Paul Barwell CEO of the Solar Trade Association told Solar Power Portal: “EIS funding has played an important role in helping to build the UK solar market but most knew that it would not last forever and the solar industry has a broad range of funding available to it today.
“As the costs have come down, deployment has increased, and the industry has become familiar with the low risk investment operating under the Renewable Obligation and feed-In tariff (FiT) schemes.”
Speaking to Solar Power Portal, Paul McCartie, structured finance director at Lightsource Renewable Energy played down the impact of EIS exclusion. He said: “Lightsource used [EIS] historically as a funding method a lot…We’ve expected that this change was coming anyway and it’s not really a huge surprise – we had already started to look at doing things differently anyway.”
Barwell echoed McCartie’s sentiments, stating: “Our members have indicated that this is more of a bump in the road than a showstopper. There are other policy issues where the case for increased support is stronger – not least a review of the FiT for mid-scale roof mounted schemes (on warehouses, factories etc). The minister pledged to crack open the mid-scale market at an STA parliamentary event in December, and industry is keen to see the details.”
The green energy sector has given a mixed reaction to George Osborne’s budget with the Renewable Energy Association summarising that “there is much more in this Budget to please fossil fuel companies than the green economy”.