Call for Social Investment Tax Relief to level the playing field for Community Energy sector


New polling, conducted by ICM, shows that among a representative survey of adults in Great Britain, public opinion is at odds with the current Government policy approach towards the generation of clean, green energy by community groups.

  • Eight in ten (82%) think the Government should do more to help local communities generate their own energy
  • Two in three (69%) think the Government should change its mind and once again offer tax relief to those individuals who take the risk of investing in community energy

Community energy schemes see local groups raise their own finance to develop projects that generate low-carbon power that’s typically used in-situ by places like schools, health centres or village halls, or in the case of larger community owned schemes, like solar and wind farms, exported to the grid just as a commercial farm would. Surplus income generated from community schemes is then invested back into local projects, the majority of which have an environmental focus. Across the UK this has seen everything from energy efficiency improvements made to nearby homes to training and employment opportunities in green technologies.

Emma Bridge, chief executive, Community Energy England said: “Community energy groups have been hit with a double whammy of negative policy positions from Government. The closure of the Feed-in-Tariff scheme has left many community projects struggling to develop business models, and at the same time Government still refuses to allow investors in community energy schemes to be eligible for Social Investment Tax Relief.

“It’s particularly frustrating to know that fossil fuel schemes are still receiving massive amounts of Government support, which many see as subsidies in all but name, yet individuals and local groups, who are willing to raise, and risk, their own finance to help create clean, green energy, benefitting communities aren’t offered any support or tax reliefs.

“We’re in a climate crisis; it would make ethical and economic sense to support those citizens helping to reach the zero-carbon targets. We call for an immediate reinstatement of Social Investment Tax Relief for those investing in community energy.”

The annual survey tracking public opinion towards community energy has reported that eight in ten, or 82%, of respondents, a record high, think the Government should do more to help local communities generate their own energy, and two in three, 69%, think the Government should change its mind and once again offer tax relief to those individuals who take the risk of investing in community energy. This includes a sharp increase in support from those who identify as Conservative Party voters, with support for a reinstatement of tax relief leaping 25 percentage points, from 43% in 2017 to 68% in 2019.

Colin Baines, Investment Engagement Manager for Friends Provident Foundation, said: “Community energy is particularly attractive to impact investors like us because it brings social as well as climate benefits and retains far more economic value within communities. We believe it could play an important role in a just transition to a net zero economy.

“With impact investing moving into the mainstream, access to capital is not the barrier it once was. Community energy is just the type of high impact investment this rapidly growing market is looking for. But investors need a pipeline of viable investment opportunities and a reasonable financial return.

“That is no longer forthcoming due to a lack of market access and failure of policy to recognise the added social and local economic value of community energy. The reinstatement of Social Investment Tax Relief would assist the viability of post-subsidy business models, and be a step towards a level playing field.”

The new polling data has been released to coincide with Community Energy Fortnight, supported by Co-op Energy. Respondents also indicated that they are supportive of contributing financially to help develop more community energy schemes, with 74% stating that they would be prepared to pay a small 25p surcharge each year on their energy bill to fund a massive expansion of community energy, with the profits staying in the local area. 

David Bird, chief executive, Co-op Energy said: “The polling data shows growing support for community energy. I’m proud that Co-op Energy customers can choose a tariff using community-generated electricity. We’re buying energy from 79 community schemes already; giving community energy projects a fair route to market now.

“In our role as an energy supplier we have a powerful role to play in helping the public understand that our energy landscape is changing. Promoting renewable energy, and being clear about how and where it is produced and who benefits, can encourage customers to change their energy consumption habits as we move to a digital and decentralised power system.

“Community energy groups can help us do this as they are the local, trusted and visible groups that are showing how clean, green energy can benefit neighbourhoods up and down the country.”

Community Energy Fortnight ‘People Powered Futures’ 2019, runs from 22 June – 7 July. Through a series of events Community Energy England (CEE) and its partners will be encouraging more people to explore how community energy can empower future generations to fight climate breakdown through hands on actions at a local level.

CEE, the membership body representing more than 200 local community energy groups, has today reported that 2018 was the toughest year yet for community energy. New generation capacity has fallen steeply in comparison to previous years. In 2018 7.9 MW of new community energy capacity was installed, including 0.7 MW across 4 micro hydro schemes and 7.2 MW across 47 new solar sites, (compared to 33.5 MW of new community energy capacity in 2017).

Emma Bridge continues: “The Community Energy sector is largely made up of volunteers. People committed to tackling the climate crisis. It’s a challenging time, but this is an exceptional group of people who are finding ways to collaborate and champion community energy despite the policy landscape they’re operating in. Imagine how much more of an impact they would have if they received meaningful political support?

“The polling released today demonstrates that the public is willing to support community energy using the small-change from their own back pockets. But they also expect Government to act, including offering more support through tax reliefs to those willing to invest in clean, green energy projects that benefit local communities.”

The call for a reinstatement of Social Investment Tax Relief was backed by Community Energy England member, Low Carbon Hub, their CEO, Barbara Hammond MBE, said: "Community energy is all about community innovation by social enterprises. To do this well, we need risk capital and therefore the ability to reward our investors when they provide that to us. Tax reliefs are just about the only way social enterprises can give such a reward because we rightly have tight restrictions around what we do with any profit from selling assets or increasing their value. The reintroduction of Social Investment Tax Relief for community energy projects is therefore essential to making sure communities can contribute to making the energy transition happen in a way that leaves no-one behind."

CEE has developed a template letter for you to write to your MP and a press release template for you to adapt and send to your local media.