Steve Wilks, director of finance for EvoEnergy, reflects on the Budget and what it means for employment in the sector
Considering the announcement of the COP21 Paris climate agreement last December (the first-ever universal, legally binding global climate deal due to come into force in 2020), it was a surprise that the chancellor George Osborne offered little to boost the UK’s low-carbon emission plans.
It was a Budget geared much more towards supporting the oil and gas industry. Osborne said he would “effectively abolish” the petroleum revenue tax and halve the supplementary charge they would pay from 20% to 10%.
This will no doubt help the industry through challenging times by providing job security for those already working in the sector, and creating new jobs. But it is almost a step back in terms of moving away from using fossil fuels in order to limit global warming to a rise of 2°C.
Despite this, the government did confirm that it will be making a further £730m available to support up to 4GW of offshore wind projects and “other less established renewables” through its contract auction process. Of course, this is very promising in terms of employment in the sector, but it looks like solar has been snubbed.
Solar is considered to be a more established renewable but it has faced a difficult time recently after cuts to the government’s Feed-in Tariff, which ministers admitted could result in 18,700 job losses (more than half of those working in the industry).
But it’s not all doom and gloom for the sector; there were other reforms mentioned in the Budget that could end up having a positive effect on the future of solar.
Dubbed the ‘Budget for small businesses’, Osborne committed to cutting corporation tax from 20% to 17% by 2020 and increasing the business rates relief from £6,000 to £12,000. The changes, which will come into force in April 2017, will affect around 850,000 small firms that will either not have to pay business rates, or will pay lower rates. He also said that those relieved of paying the rates would see an annual saving of nearly £6,000.
What will a small company do with that extra money? Well chances are they’re likely to invest it back into their business. Firms that are worried about soaring energy prices over the next two years (as warned by Ofgem) may invest in solar as a way of achieving energy security.
The uptake of solar is also likely to increase with the government’s new Energy Savings Opportunity Scheme (ESOS). This requires businesses to prove their green credentials in order to comply with the regulations, or risk getting hefty fines.
Landlords are being hit with new energy efficiency regulations too, and as of 1 April 2018, properties rented out in the private rented sector must have a minimum energy performance rating of E on the Energy Performance Certificate (EPC). All of this should result in a boost to the industry and ensure new job opportunities over the next few years.