The UK Government's announcements on cuts to the renewables sector is having a "significant impact" on investor confidence, according to Scottish Renewables.

A survey of major lenders to the renewable energy sector was carried out by Ernst & Young (EY), who confirmed banks had become reluctant to finance projects.

The study asked a sample of active onshore wind investors about their willingness to lend to projects in the aftermath of announcements to close the Renewables Obligation (RO) in 2016 instead of 2017.


Over half of respondents said they were not prepared to lend until the UK Energy Bill had received Royal Assent, which is not expected until next year.

Scottish Renewables said this is largely due to the current political and regulatory risk concerning the RO, along with the lack of guidance on the process and timing of the Energy Bill amendment through parliament.

Michael Riley, Senior Policy Manager for Scottish Renewables, said: "The UK Government's decision to remove financial support for some onshore wind farms a year earlier than planned has had a clear and negative impact on the ability of developers to attract finance to their projects. 

"Our members have already expressed concern that they were entering an investment hiatus and this survey of lenders would indicate their suspicions are well founded."

Scottish Renewables has previously claimed closing the RO early will cost Scotland approximately £3bn of investment in the renewables industry.

(LM/CD)