Energy scheme back on track

The scheme was due for launch on September 30 but was suspended at short notice for a review of European Union rules about state subsidies.

Charles Hardcastle, an energy investments specialist at Carter Jonas in York, has been following the arguments.

He says it now looks as if the plan is back on track, with a phased launch for the non-domestic sector in the first instance, followed by a scheme for householders in October 2012, as expected.

And he understands that until next April, the scheme will run alongside entitlement to Enhanced Capital Allowances (ECAs) for most of the kit likely to be involved.

The ECA scheme pre-dates Feed-in Tariffs and the Renewable Heat Incentive (RHI) as a means of subsidising green energy investments.

It allows 100 per cent of the capital costs of certain technologies, including biomass boilers and ground-heat extractors, to be set against taxable profits from the whole of the business concerned over the first year of operation.

The introduction of RHI bonuses for each therm of heat produced by the same technologies raised questions about whether double-funding could and would be allowed. But Carter Jonas understands ECAs will run alongside the RHI until April 2012.

In a newsletter for clients, Mr Hardcastle said: “The payment of the RHI and the guaranteed availability of ECAs just until April 2012 represent a significant window of opportunity. There is an imperative to act sooner rather than later.”

A small increase in Feed-in Tariff rates for electricity from new anaerobic digestion plants of up to 500 kw capacity was given the go-ahead this week, after being called in for review by the European Commission. The NFU’s renewable energy specialist, Jonathan Scurlock, said: “We hope some previously marginal on-farm AD projects will now progress.”