Many Solar EIS and VCT investments may need to close early after the Government’s decision to cut the FIT rates for solar by up to 55% from 12 December 2011. Financial advisers must be sure that any funds they recommend to their clients are able to invest in solar assets, which are generating electricity under the FIT, by the deadline, warns Oxford Capital Partners.
Oxford Capital is confident that the proposed FIT Review will have a limited impact on its Solar EIS business. It has an exclusive agreement for over 1,000 residential solar installations, three quarters of which are already installed and generating electricity under the FIT. It anticipates that all the sites, and potentially more, will be generating electricity before the 12 December deadline – which means it will be able to keep taking investments into its Solar EIS after 12 December.
This is unlike many solar EIS providers which do not have pre-installed sites and some have already announced that they will have to return money to their investors. With just six weeks left to install panels and get them FIT registered, many will have little hope of setting their projects up and running in time. Planning permission alone can take more time than this, which is probably a nail in the coffin for many commercial projects.
David Mott, Investment Director, Oxford Capital, says: “The review and reduction of the FIT rates was in the coalition agreement and should not come as a great surprise. That was why we have already secured exclusivity over 1,000 sites, nearly three quarters of which have already been installed by our Solar installation partner. Having anticipated the Government’s move, we have secured a large stock of sites for our Oxford Capital Solar EIS. This will provide many advisers with the opportunity to invest their clients in the Oxford Capital Solar EIS after other EIS offerings are closed.”
Existing investments made under the Oxford Capital Solar EIS are unaffected by the announcement by Greg Barker and will continue to receive FIT income at the top rate of 43.3p /kWh as well as attracting the EIS tax reliefs.
