Community energy organisations across England and Wales have called on new BEIS Secretary Grant Shapps to exempt their schemes from the Cost-Plus Revenue Limit.
The de facto windfall tax on renewable generators was announced by Liz Truss’ government earlier this month as a “temporary revenue limit” due to take effect at the start of 2023.
In an open letter sent to Shapps earlier today, 28 signatories led by Community Owned Renewable Energy (CORE) warned the mechanism will “unintentionally hurt community renewable energy projects at a time when their growth should be supported”.
They wrote: “Unlike conventional models where excess profits go to private investors, community energy projects redirect all revenues – in excess of operating and financing costs – to the local community by way of community benefit funds.
“Therefore, an uplift in revenues leads to higher direct local investment in energy efficiency, fuel poverty alleviation, and other social and environmental programmes.”
The letter highlights the positive impact of these initiatives across England and Wales and their contribution to local economies, including a £15m spend in 2021.
Proceeds from community projects have been diverted into some of the countries’ most deprived and underserved areas, helping thousands of people to reduce their energy bills, it added.
“The proposed revenue limit could cut the budgets available for these vital programmes, many of which depend on community energy projects as their sole or main source of income,” the letter continued.
“As the government determines the full scope of coverage of the revenue limit, we urge you to ensure that community energy projects are exempt and continue to play their full role in driving local growth and supporting people through the cost-of-living crisis.”
Shapps was appointed new BEIS Secretary earlier this week and faces a number of questions over the Cost-Plus Revenue Limit introduced by his predecessor Jacob Rees-Mogg, including the level at which the government will set the revenue cap and the duration of the scheme.