The death of "gravy train" tax breaks for solar power was inevitable, but other venture capital trusts could be right be clients, say advisers who invest in renewable energy.
Department of Energy proposals published last week would slash the feed-in tariff (FIT) - the subsidy on solar panels - by around 50%. The plans would impact solar Venture Capital Trusts (VCTs), often recommended by advisers specialising in ethical investment.
The falling price of solar energy was an obvious cause of the suspension, said Ian Hudson, at Hudson Green & Associates.
"It was always a short-term measure," he said. "It's become a gravy train. A £20,000 investment on a solar panel on your house can yield 8 or 9%, so it's no surprise the subsidy has gone."
Advisers looking for alternatives should consider an Impax Environmental Markets fund, he said.
Solar VCTs were also popular with high net worth (HNW) clients looking for sophisticated investments.
It is clear the government realised green energy "came at a price", said Mark Hughes, a HNW IFA who uses VCTs extensively.
"FITs were not designed with the investor in mind - they were to meet Britain's international energy targets," he said.
But other VCTs still presented attractive investments, he said. Non-equity correlated VCTs such as Edge Performance, which backs start-ups in the live music industry, were an ideal way to diversify sophisticated investors' portfolios, he said.
However analysts are warning investors looking for alternative ways to take advantage of investment tax-breaks against moving straight to other VCTs.
Ben Seager-Scott, a senior research analyst at Bestinvest, said: "Specific VCTs like solar power are very different entities to more generalist schemes."
Bestinvest would be reluctant to commit more money to any scheme under consultation, he said.
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