It took a while for all the implications of George Osborne's "Emergency" budget to sink in, perhaps a couple of hours until Twitter started buzzing. "We will remove the out-dated Climate Change Levy exemption for renewable electricity." So renewable energy generators, already hit by other government policies, will now have to pay out more in tax: £450 million lost to the Treasury in 2015/16, rising to £910 million in 2020/21. That’s £3.9 billion over the next six years.
As the name of the tax, the Climate Change Levy, implies, it was created to encourage clean energy generation, a carbon tax more or less, so extending it to renewables is bizarre. However, there is now no need to rename it. By hobbling renewable energy development it is now a levy to encourage climate change.
Share prices in renewable companies fell immediately (thanks to Friends of the Earth for the image)