George Osborne quietly moved to kill off Britain’s renewable revolution in Wednesday’s budget as he stealthily enacted David Cameron’s rumoured call to his cabinet to kill off the “green crap”.
With such stealth that it went almost entirely unspotted by environmentalists and journalists, who were busy focusing on his move to reduce fossil-fuel energy costs for big business, Osborne at a stroke abolished a key tax break that has attracted hundreds of millions of pounds of private money to help build Britain’s green energy future.
Tucked away in the budget’s red book is an innocuous-looking line that Enterprise Investment Scheme (EIS) tax breaks will no longer be available for companies benefiting from the renewables obligation certificate (ROC) scheme or the renewable heat incentive (RHI).
Of these, the ROC scheme is the big one. It underlies all the big wind, solar and other renewable technologies in the UK. The EIS tax breaks are available to investors who put money into all sorts of start-up companies. Until now that has also included firms building wind and solar farms. Now, after royal assent to the legislation in July, it will not be.
One City fund manager on Wednesday predicted that many funds would simply have to hand back money to investors that they could not deploy into solar or wind projects by then.
This will mean a big slowdown in the deployment of renewables in Britain, a crying shame because renewable investment and deployment have picked up sharply in recent years, after a decade of delay, as Britain finally seemed to be taking European renewable energy targets seriously.