September 2014

CfR has provided input to and supported the responses by Co-operatives UK and Community Energy England to two consultations which could affect the future of vital investor tax incentives for community energy.

The Co-operatives UK response can be found here.

CfR’s view is that it is vital to safeguard Enterprise Investment Scheme (EIS) investor tax relief for community energy projects (including shared ownership projects) developed under the RO, FiT, CfD and RHI, or to provide a viable alternative under Social Investment Tax Relief (SITR). For SITR to be a viable alternative the investment limit needs to be lifted to £5million (or even 15million as proposed in the current consultation). RO, FiT, CfD and RHI supported business with a qualifying social enterprise structure must also be eligible for SITR, which is not currently proposed. Investor tax relief enables investment to be raised at a lower cost than would otherwise be possible, and enables surplus community income to be generated. Without investor tax relief the majority of the profit earned by many community energy schemes, especially roof-top solar, will go to covering investor returns and the wider social policy objectives sought by the Community Energy Strategy will not be achieved.