- The REA respond to Autumn Statement saying Government have sent wrong signals to investors with renewable energy taxes;
- REA highlights need to achieve billions of annual investment in UK renewables and clean tech to meet Net Zero – which will be at risk from damaging investor signals for renewables;
- Sector calls for tax relief on low carbon investments to help stabilise energy prices and offer long-term energy security;
- Welcomes added Government investment on energy efficiency, but urges support for small scale domestic renewables and energy storage;
- Ending the road tax exemption for electric vehicles expected, but warns that taxes on zero emission vans could harm transition.
The Association for Renewable Energy and Clean Technology (REA) has responded to today’s Autumn Budget, saying the Government have sent wrong signals to investors with renewable energy taxes which compare unfavourably with the oil and gas sector.
The REA point to gas fired plants receiving no additional levy ‘due to higher input costs’, while renewable generators with rising input costs too will be subject to the levy. Gas prices have risen in the past nine months, but so too have renewables feedstocks such as pellets and waste feedstocks.
While the REA says that businesses in the renewables industry want to play their part in solving the current economic crisis, such disparities could harm future investment in cheap, green energy. The Government is urged to provide tax relief for low carbon investments to help stabilise energy prices and offer long-term energy security.
Elsewhere, the REA have welcomed the added financial commitment to energy efficiency, but have expressed concern that the 2024 start date is an unnecessary delay when action needs to be taken immediately. Once again, the REA says that more technologies, such as energy storage, need to be included under the Energy Saving Materials list which provides VAT exemptions.
In addition, the REA says that the sector expected the change to the electric vehicle Vehicle Excise Duty (VED), but warned that ending the exemption for zero emission vans could harm the transition for these vehicles in the face of higher costs. The REA also highlighted the need to make sure that there is full equity for all vehicles to avoid a scenario where some conventional (ICE) vehicles would, in fact, pay less than zero emission alternatives.
Finally, the REA has welcomed plans for an Energy Efficiency Taskforce, but says now is the time for action, not more warm words.
Frank Gordon, Director of Policy at the Association for Renewable Energy and Clean Technology (REA), said:
“While the REA and its members recognise the immense economic challenges facing this country, we would question the wisdom of subjecting the cheaper, greener renewable power sector to a more punishing tax system than its oil and gas counterparts.
“We note the exemption for smaller sites, but I would strongly urge the Government to fix this disparity as there is a strong need for tax relief for low carbon investments to help stabilise energy prices and offer long-term energy security. This is crucial for getting investments in renewables moving again following the pause that resulted from the last few months of political and policy uncertainty.
“The added investment into energy efficiency is a welcome move, but action needs to be taken immediately. Additionally, more technologies, such as energy storage, need to be included under the Energy Saving Materials list which provides VAT exemptions.
“Finally, while we expected a change to Vehicle Excise Duty exemptions for electric vehicles, the Government needs to make sure that they are not disincentivising the transition for vans, in particular. It also must be ensured that financial incentives remain in place for the move to such vehicles in light of recent charging price rises and the withdrawal of grants for electric car purchases.
“Overall, there are a lot of outstanding questions from our sector that need to be answered by the Government.”