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Feed in tariff review, EIS budget announcement and other blows for community renewables
After what felt like a long period of waiting for the Whitehall policy machine to kick into action on renewables, the few months since the introduction of the feed in tariff has been a whirlwind of good and bad fortune, especially for people trying to get community scale renewable schemes off the ground.
Last Monday I was at Carbon Leapfrog’s first major event in the City, bringing together their professional networks with community energy practitioners. It was great to hear from so many people ‘doing’ and I expect they were the tip of the iceberg. Great too to hear the word ‘co-operative’ both from so many organisations established and new.
Though the mood at the event was positive, community scale energy hasn’t had an easy ride of late. At the beginning of February government announced an early, fast track review of solar pv schemes over 50kW. The line is that the Treasury is wobbly about city investors cashing in on ‘solar farms’, which the government defines as developments above 250kW. You’d think then that this would be the target for the solar pv FIT review, but not so. This from Friends of the Earth: “…the proposed support rates for solar projects have been almost cut in half for schemes between 50kW and 150kW – the size of many proposed community-scale installations on schools, hospitals and housing estates.” FoE, which led a vocal and effective lobby for feed in tariffs alongside the Renewable Energy Association, has produced a useful briefing document on this topic.
I know of at least one renewable energy co-operative that is under huge pressure to get an installation up and running before the proposed review comes into force. For many others, business plans have been thrown into disarray.
Whatever you think about solar, if you buy into the added benefits of communities coming together to generate their own energy, this is a real blow. In comparison to all other viable technologies, solar is a relatively quick and safe first step for community action. Income generated through FITs would, in the case of genuinely community owned projects, further the development of other low carbon activity.
The second blow came with last week’s budget. The decision to remove renewable energy FIT-eligible schemes from the list of technologies eligible for Enterprise Investment Scheme tax relief will hit the growing number of groups issuing withdrawable shares through an industrial and provident society to capitalise their schemes.
For those heartened by the coalition government openly stating its commitment to community ownership of renewables last May, the last couple of months feel like a reversal of fortune. We’ve previously argued that to thrive, the unique attributes of community owned renewables merit tailored planning, finance and tax treatment by government. If the Treasury’s only concern is for a run on solar by the already-rich, how about protecting community solar schemes from the blow of a tariff reduction by exempting enterprises constituted as industrial and provident societies, community interest companies or charities, from the review? Ditto with the Enterprise Investment Scheme.
This isn’t about special treatment, but recognition that the educative, community building and empowering approach of community ownership has a value beyond the financial.
If this any of this is or is likely to affect you, there are things you can do:
1. Submit evidence to inform the Renewable Energy Association’s response to the early FIT review. The survey will enable the REA to get an idea of the impact the proposed tariff reductions will have on your projects, and an idea of the lowest reductions sustainable if significant redundancies in the sector are to be avoided. Complete the survey.
2. Provide me with examples of where the announcement on EIS and renewables is going to affect your business plans, or where you have successfully used EIS in the past. Email direct to me at email@example.com.
I'd be interested to hear your views on the above - you can leave comments here or join in our LinkedIn networking group here (you'll need to be a member of the Co-operatives UK LinkedIn group first).