The Government could scrap plans to prevent beneficiaries of the feed-In tariff (FIT) scheme from receiving venture capital investment from 2012, according to proposed exemptions outlined in a Treasury consultation.
According to an explanatory note in the Treasury’s tax-advantaged venture capital schemes consultation, the exclusion will not apply “where the energy is hydroelectricity or based on anaerobic digestion, or where the company is one of a number of specified types of social enterprise”.
The plans were first revealed in the 2011 Budget, which outlined proposals to “consult on options to provide further support for seed investment, simplification of the Enterprise Investment Schemes (EIS) rules by removing some restrictions on qualifying shares and types of investor, and refocusing both EIS and VCTs to ensure they are targeted at genuine risk capital investments”.
It added: “FIT businesses will be added to the excluded activities list.”
Speaking at the time, a Treasury spokesman told MRW that the FIT exclusion would not be part of the consultation and would have gone ahead in April 2012 subject to EU state aid clearance.
News of the exemption has been welcomed by Renewable Energy Association chief executive Gaynor Hartnell.
She said: “We’re very pleased the Government has listened. The proposed exemptions will allow community-based renewables projects to continue to benefit from FITs. It could never have been the Government’s intention to undermine these schemes, which have an important role to play in building community support for renewables. It’s a relief to see it is going to be rectified.”