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Tax Rebates and Cuts in Stamp Duty to Encourage Homeowners and Businesses

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Core prompt: Assistant Professor of Global Energy Frederik Dahlmann says the UK Government should consider tax rebates and cuts in stamp duty

Assistant Professor of Global Energy Frederik Dahlmann says the UK Government should consider tax rebates and cuts in stamp duty to encourage homeowners and businesses to produce their own electricity.

Dr Dahlmann believes radical solutions are needed for the UK to meet its energy needs and keep the lights switched on as the country looks to move to more carbon-neutral energy sources.

Consumers are being hit by rising energy prices as the transition begins, but with much more investment in new nuclear plants and renewable energy needed, Dr Dahlmann feels businesses and homeowners should be encouraged to produce their own electricity and gas.

“To create a genuinely open electricity market to attract new energy entrepreneurs and ‘prosumers’ – companies and individuals that are both electricity generators and consumers - perhaps a different set of financial incentives are needed, ones that would make investments in energy infrastructure more immediately attractive,” said Dr Dahlmann, who worked as an energy analyst in London before moving into academia.

“How about tax rebates for all companies and stamp duty offsets for homeowners that invest in decentralised energy generation such as rooftop solar and wind, or in energy efficiency measures?“The aim should be to make the energy market more democratic by increasing the ways in which people choose and participate in, finance, and benefit from the decentralised solutions to the energy market’s problems, rather than leaving this to government and the ‘Big Six’."

Dr Dahlmann cited examples already in use of homeowners producing electricity via solar photovoltaic panels on their roofs, Adnams brewery using renewable waste products to generate gas, and Hamburg in Germany buying back its distribution network.

“Many industry commentators would argue that to solve the complexities and challenges involved in producing and consuming energy in the future we will need much more proactive engagement from the public and from the industry,” said Dr Dahlmann.

“Specifically, what’s needed is a greater sense of ownership and responsibility for our energy; where it comes from, its significance to our livelihoods, and the economic and environmental costs involved. Such an arrangement should encourage many more homeowners, businesses, and local communities to benefit from a fundamentally open electricity market by raising their awareness of the various technological options available, but also allow them to share in the gains.

“The Energy Bill’s Electricity Market Reform (EMR) creates incentives in the form of guaranteed electricity prices for various means of generating electricity. These are the so-called “contracts-for-difference”, bargains most recently seen being hammered out between the Government and EDF over the price for electricity from Hinkley Point C nuclear power station. The question is whether forward-looking financing mechanisms like these are sufficient to attract the new energy entrepreneurs and 'prosumers' to the market. Behavioural science tells us that, especially with incentives whose pay-off lies in the distant future, people are often unwilling to make the investment now for a payback later.”

 
 
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