Changes to Regulations May Affect Financing for Community Energy Schemes

Two recent financial regulatory announcements could affect the ability of community energy projects to raise income and offer an attractive return to their investors.

 
Firstly, the Chancellor announced in the budget that the Enterprise Investment Scheme (EIS) tax relief currently available to renewable energy projects will be removed from projects qualifying for ROCs and RHI. This is because EIS is intended to stimulate investment in high-risk projects, and those receiving payments in the form of ROCs or RHI are not deemed high-risk.
 
Secondly, a new set of rules has been published by the Financial Conduct Authority (FCA) stating that companies that want to raise money through selling shares will need to show that they are promoting their investment to those who really understand investment and the risks involved, otherwise known as ‘sophisticated investors’. This has come about due to the rise in crowdfunding schemes across a whole range of project types, although community energy schemes will certainly be caught up in it. However if your organisation is set up as an IPS then you are exempt from the changes.
 
More about the changes and how they might affect your activities: www.cse.org.uk/news/view/1821