Tory MPs have urged the Chancellor to give firms a tax break for investing in clean energy to lower energy bills or risk losing investment overseas. There are concerns that the United State’s subsidies for green power could divert investment away from the UK through President Joe Biden’s Inflation Reduction Act. The initiative provides around £307 billion in subsidies to green industries.
Andrew Selous, Tory MP for South West Bedfordshire and a member pf the Conservative Environment Network (CEN), said: “For over a decade, we’ve successfully attracted investment to the UK to build renewables and drive down their costs rapidly.
“However, the USA’s enormous subsidies for clean energy could entice future investment away from the UK.
“To compete, we need to offer tax breaks to renewable firms that invest their profits here in new renewables projects, helping us meet our climate goals and cut people’s bills.”
The offshore wind industry alone will see £155 billion of private investment in new offshore wind projects between now and 2030, taking the average yearly spend to over £17 billion a year.
The industry is looking to secure £17.8 billion this year to build enough renewables to power 12.5 million UK homes.
Selaine Saxby, Tory MP for North Devon and a member of CEN, said: “We need to build more renewables as quickly as possible to cut energy bills for households and businesses.
“The UK will struggle to maximise its renewable power potential without stronger incentives to encourage firms to invest in new offshore wind farms, including the new generation of floating offshore wind farms in the Celtic Sea.
“By offering a tax break to firms investing in new renewable projects, we can stay ahead of our competitors and power our country with cheap energy.”
Philip Dunne MP, the chair of the Environmental Audit Committee, told how Conservative policies have successfully scaled up renewables and driven down costs in the past ten years.
He warned “there is now a real risk” we could lose out on future green investment to the US unless the UK government offers capital allowances for new wind and solar projects from renewable companies.
He said: “The Budget is an opportunity to keep the UK competitive and win the investment in cheap renewables to lower people’s bills.”
The green energy sector has been hit hard by inflation and the war in Ukraine, a boss at trade association RenewableUK warned.
Both have sent the cost of turbines and raw materials rocketing by at least 20 per cent in the past year.
Ana Musat, executive director of policy at Renewable UK, said: “The industry is facing a perfect storm because on top of that, the US and EU are offering massive financial incentives to lure companies to build new clean energy projects elsewhere.
“We’re calling for the Chancellor take action in his upcoming Spring Budget, by providing the same tax relief for renewables that the oil and gas sector already gets, as a first step towards levelling up the playing field.
“This would help consumers, as despite the cost pressures we’re facing, renewables are still by far the UK’s cheapest source of new power, so new policies that ramp up investment in renewables will help to tackle the cost of living crisis for billpayers.”
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