Rachel Nutt, who is also head of Renewable and Sustainable Energy at MHA MacIntyre Hudson, believes that Brexit and the lack of announcements about future subsidies that has resulted from it is causing a period of inertia that is stalling many new projects. This is important because subsidies have so far supported much of the renewables sector in the UK.
“Everyone is assured there is a huge power demand for the future, lack of grid capacity, and a need to hit green energy targets” said Ms Nutt. “However, the lack of clarity on funding has caused a significant slowdown in the market. Even with the advent of more innovative battery storage capacity and falling panel prices, the sector needs a new subsidy announcement to gain serious momentum in the areas of on shore wind and solar.
She added that the industry is also facing a number of other challenges around new tax law. The new Transactions in Land legislation could result in many large scale projects being subject to the higher tax charge of income tax rather than Capital Gains Tax.
“The future demand for grid capacity is also likely to be a major challenge” Ms Nutt continued. “The push into electric vehicles, and lack of capacity on the grid in the areas where it is most needed, is likely to be a real practical barrier to growth without significant investment. These pressures are ironic when we are seeing more high street funders, late to catch up to the market, finally keen to lend.”
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