Solar singled out for ‘rough treatment’ in Budget

Solar power was singled out for “rough treatment” in the Budget, according to the industry’s largest trade body. The Solar Trade Association, which represents around 450 companies working in solar […]

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By Vicky Ellis

Solar power was singled out for “rough treatment” in the Budget, according to the industry’s largest trade body.

The Solar Trade Association, which represents around 450 companies working in solar thermal and solar power, found fault with the Chancellor’s 2012 Budget announcement yesterday.

In the Budget, solar power wasn’t included under the Enhanced Capital Allowances scheme, part of the Government’s programme to manage climate change. The ECA lets businesses write off the full capital cost of their investment in energy-saving technology against their taxable profits.

The STA argues solar panels should have been included. Instead, solar thermal – along with heat pumps – was taken out of the ECA.

STA Chief Executive Paul Barwell said: “We cannot understand why solar has been singled out for rough treatment on Capital Allowances when it’s a popular technology which will soon reach grid parity and provide businesses with a real alternative to dependence on fossil fuels.”

“Enhanced Capital Allowances are immensely valuable for helping projects over the initial investment hurdle. We would argue there is a case for extending ECAs to solar PV, as looking forwards FiTs alone are unlikely to give businesses the rates of return they need to invest.”

Feed-in Tariffs are the subsidies offered to people who generate solar power. They were controversially halved by the Government at the end of last year.