What does Brexit mean for renewables in the UK?

After the EU referendum and the UK voters decision to “brexit” from the the European Union, questions are being asked of the UK governments commitment to renewable energy.

Households and businesses across Britain have benefited financially from the government backed Renewable Heat Incentive (RHI) scheme and the Solar PV Feed-In tariff which has helped thousands to recoup the financial cost of install renewable technologies. These financial incentives have been driven mainly because of the European Unions drive to reduce carbon emissions.

As part of a EU, the UK is committed to deliver 15% of its energy from renewable sources by 2020 and to further reduce CO2 emissions by 40% by 2030. Failure to reach these renewable targets results in huge fines from the European Union. However, now that Britain has voted to leave the EU, uncertainty looms over whether the UK will continue to honour these carbon reduction targets. The UK government is committed to the RHI up to 2021, but it is due for reform in 2017 and there is uncertainty over what will happen to it.

In contrast, the UK leaving the EU might actually bring about benefits for renewable energy by way of a reduction in VAT. The European Court of Justice has ruled that the UK’s reduced 5% VAT rate on domestic renewable energy heating installations is unlawful. As a result, the UK government will be forced to raise this VAT rate up to 20% later this year, which could add thousands of pounds to the cost of installing renewable.

With the current turmoil engulfing Westminster following the brexit vote, renewable energy is unlikely to be anywhere near top of the priorities list.

Visit Our Showroom

The AC Gold renewable energy showroom in Stirling offers an opportunity to see a range of renewable energy systems on display including solar PV, off-grid power solutions and a range of domestic biomass log and pellet boilers.

AC Gold Renewable Energy Showroom
11 Back O'Hill Industrial Estate, Stirling, FK8 1SH

Mon-Fri: 9am - 5pm