Unplugging Energy Projects From SEIS Hits Community Schemes

People power is running 130,000 British homes from investors plugging in to more than 200 community energy schemes.

Investors have staked £190 million in solar, hydro and wind schemes across the UK – mostly taking a shine to solar energy.

Much of the money has come from the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) which offer investors generous tax breaks in return for their cash.

The rest of the money comes from grants, private investment, Social Investment Tax Relief (SITR) or crowdfunding.

In context, the number of homes powered by community energy equates to a city the size of Cardiff or Coventry.

Call to restore subsidies

The community groups have around 30,000 members supported by 1,700 volunteers, according to the first Community Energy State of The Sector report.

Launching the report, Community Energy England CEO Emma Bridge warns shrink government financial support is endangering future projects.

EIS and SEIS rule changes have made energy investment a challenge, while feed in tariff subsidies have been cut.

“There is a clear link between recent subsidy changes and an increasing number of failed or stalled community projects,” she said. “These, or similar, support mechanisms are essential in providing the community energy sector with the security and viability to progress their projects and objectives.

“If government is serious about creating a new renewable energy industry to meet the nation’s power needs it has got to share this confidence, embrace the community energy sector and restore the modest support that it needs to thrive.”


Government response

The government, through the Department for Business, Energy and Industrial Strategy disagrees.

“This government is committed to empowering communities and these projects, which put local people in the driving seat, are an important part of a clean, secure and affordable energy system,” said a spokesman.

“It’s only right that we now focus funding on new low-carbon technologies so they can develop, delivering better value for money for bill payers and a further boost to our renewables industry.”

The government stopped EIS and SEIS investments in renewable energy last year.

The rule change stopped investors receiving tax incentives that reduced their income tax and offered capital gains breaks through the schemes providing shares in community companies were held for three years.

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