Vol. 500 No. 7
283 Mr. Gormley asked the Minister for Finance if he will extend tax incentives to individuals who invest in their own electricity and heating needs using, for example, solar panels; and if he will make a statement on the matter. [5086/99]
In the Finance Act, 1998, I provided for a new relief for corporate investment in certain renewable energy projects. The relief is in the form of a deduction for tax purposes from a company's profits. To qualify for the relief the energy project must be in the solar, wind, hydro or biomass technology categories including those successful in the Third Alternative Energy Requirement competition (AERIII-1997) and be approved by the Minister for Public Enterprise.
The purpose of this measure is to encourage investment in renewable energy with the aim of facilitating the growth of electricity generation capacity using these alternative sources of energy. The measure is aimed at protecting the environment and reducing CO2 and other greenhouse gas emissions. The Government's current target is to increase renewable energy based electricity generating capacity from 5.3 per cent in 1997 to 10 per cent by the year 2000.
The relief is capped at the lesser of 50 per cent of all capital expenditure or £7.5 million for a single project. 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at £10 million per annum, and unless the shares are held for at least five years by the company the relief will be withdrawn. The relief will be available for a period of three years commencing from the date of EU approval. EU state aid approval was given on 18 January 1999 by the Competition Commissioner, Mr. Karel Van Miert.
It would be premature to consider further tax incentives for alternative energy until the operation of and benefits of these new schemes have been fully evaluated.
