While the budget trebled the Green Investment Bank's funding to £3 billion (thereby encouraging greater investment in new, low carbon technologies) and made a commitment for the Bank to start operation in 2012-13, there were no new proposals for encouraging renewable energy developments per se. Having said that, the announced review of the Capital Allowances treatment of expenditure on plant and machinery may yet lead to benefits for certain small scale developments.
Of more immediate interest / concern for the renewable energy sector is the review of the Feed-in Tariff (FiT) regime which was announced by the Department of Energy and Climate Change the week before. On the positive side, the UK Government proposes to increase the tariff for farm scale (having an installed capacity of up to 500kW) Anaerobic Digestion (AD) installations while on the negative side reducing the tariff for larger scale (having an installed capacity of more than 50kW) or stand alone solar (photovoltaic (PV)) installations. The reasoning behind these changes is to encourage farm scale AD where it is believed the current tariffs are not high enough to render such schemes viable while discouraging the larger PV schemes benefiting from the current FiT regime. The period for consultation is due to end on 6 May and if agreed the intention is that the new tariffs will come into force on 1 August 2011. The new tariffs will not however affect schemes already entered into.
This review of AD and PV schemes is part of a review of the whole FiT regime which was first introduced in April 2010. The intention is that this comprehensive review will be completed by the end of the year, with any additional changes to the existing rates introduced in April 2012.