Vol. 524 No. 3
123 Mr. Sargent asked the Minister for Finance the fiscal incentives which operate to encourage the development and harnessing of renewable energy technology in view of the fact that a reduced VAT rate of 5% for wind and hydro equipment has applied in the United Kingdom since 28 July 2000. [22424/00]
As I have recently outlined in reply to an earlier question – PQ 19818/00 – in 1998 I introduced a scheme for tax relief for corporate investment in certain renewable energy projects. To qualify for the relief the energy project must be in the solar, wind, hydro or biomass technology categories and be approved by the Minister for Public Enterprise. The relief takes the form of a deduction for tax purposes from a company's profits for an investment in new ordinary shares in a company setting up a renewable energy project. The relief is capped at 50% of all capital expenditure, excluding land, net of grants, for a single project or £7.5 million, whichever is lesser. Investment by a company or group is capped at £10 million per annum, and unless the shares are held for at least five years by the investor company the relief will be withdrawn.
Following clearance of the scheme by the European Commission, I made an order providing that the relief would come into operation from 18 March 1999 for a three year period.
