Pre-Budget report aims incentivise investment in rewewables

News Article - 23 December 2009
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Chancellor Alistair Darling’s recent pre-Budget report made promises to further incentivise corporate investment in low-carbon technologies.

Tax rebates for the installation of solar panels and wind turbines have been announced, and electric cars will become exempt from company car tax for the next 5 years. The government will also shift down emissions thresholds for Company Car Tax by 5g CO2 per km, providing firms with incentives to select electric or low-emission vehicles.

The measures have been praised by much of the green business community, yet there has been some backlash over proposed changes to the Climate Change Levy. Under the original terms of the levy, organisations that make binding commitments to cut carbon output can benefit from tax relief. The changes would reduce the rate of relief from 80% to 65% to enlarge corporate energy bills and encourage businesses to take further steps to reduce their energy usage.

Some groups have also criticised the Chancellor for making insufficient progress to develop and sustain a low carbon economy. Repeated calls for a green investment bank have not been answered, and there are concerns the measures outlined in the pre-Budget report do nothing to target the UK’s continued reliance on fossil fuels.

However, in general the measures were well received by green groups, who were pleased to see the government incentivise homeowners to invest in ‘micro generation’ technologies, such as solar panels. It is hoped the increasing role of individuals in the climate change agenda will encourage businesses to lead the way with their own carbon-reduction programmes.

“Organisations that commit to carbon-reduction generally benefit from the most lucrative tax breaks,” comments Kevin Misselbrook, Customer Services Director at Access. “As the green economy takes hold, the government will further incentivise businesses to invest in low-carbon technology. Those organisations that have the resources and infrastructure to make binding commitments to carbon-reduction targets will in many cases strengthen their position financially.”

As the need for carbon-reduction initiatives intensifies, businesses that do not have the capacity to pursue effective programmes may find themselves facing unfavourable market conditions. Governments may soon require organisations to provide robust carbon-output statistics in order to analyse whether carbon-reduction targets can be met, and businesses that cannot provide this type of data may find compliance regulations increasingly difficult to meet.

Organisations that do not have carbon-reporting functionality should consider implementing a solution – such as Access carbon-reporting software - sooner rather than later. Developing resources that can be used to pursue energy efficiency is one of the best ways companies can help ensure carbon-reduction incentives reward rather than punish their efforts.

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