- About us
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- Getting community energy involved in Local Enterprise Partnerships
- The energy system is in flux, let’s ready ourselves for a community takeover
- Celebrating a strong year for energised communities at CfR
- Community Energy at the forefront of disruptive change in the energy sector
- Meet your MP about community energy this Community Energy Fortnight
- We can do more to foster community energy in low-income communities.
- What next for community energy in a post-FIT world?
- A new generation of investors are using their money to drive change
- People, Power and Happiness
- A review of CEF17
- Community energy, a magic bullet for a multitude of charitable objectives
- Community Energy Fortnight Lobbying Pack 2017
- How smart technology is empowering rural energy projects
- Community energy is not just what we do, but how we do it - By Ed Mayo, Co-operatives UK
- “It's all still to play for" says Co-op Energy's Head of Renewables
- York Community Energy trip round the panels of Auld Reekie with Edinburgh Community Solar
- The Ramblers: Protecting the places we love to walk in a changing climate
- Why Community Energy Fortnight is so important - By Emma Bridge
- CEF17 is Powering Together!
- Community Energy Fortnight 2017 dates announced and news of a new collaboration
- The community energy revolution is evolving, and the future’s bright
- Investing in community energy schemes
- Energising faith communities: the Spirit project
- Community Energy - the way forward
- CEF16 dates announced
- The community energy revolution pushes on in face of storm clouds
- Blogs 2015
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The green investments that can put you in the black
As Community Energy Fortnight beings, investors can check out the renewable schemes offering returns of up to 13%
Richard Body is an energy pioneer. The IT consultant is a director of the Torrs Hydro scheme in New Mills, Derbyshire, which was one of the first community-owned hydroelectric schemes to launch in the UK.
Sited on the river Goyt, where it tumbles out of the Peak District, the scheme produces enough electricity to power 60 homes. “There was power in the river that nobody was tapping into – in effect it was free money,” Body explains, who was awarded an MBE in 2013 for services to the hydroelectric industry. “Our aim was that by generating electricity, we could also generate a revenue stream for the local community.”
Torrs Hydro is one of about 75 locally owned green energy projects across the country opening their doors to the public as part of the third Community Energy Fortnight, which runs from today until 20 September.
“These projects allow the public to experience first-hand how communities can take control and go about owning, generating and saving energy,” says Will Dawson at Forum for the Future, which is running the event on behalf of the Community Energy Coalition, a network of environmental and sustainable energy groups.
The projects on show will be demonstrating everything from how electricity is generated from cow poo in Wrexham, to obtaining energy from underground rocks at the Eden Project in Cornwall.
As well as helping the planet, these schemes can deliver impressive returns for green-minded individuals prepared to take some risks with their money. Many have been set up to generate clean electricity using hydroelectric plants, wind turbines or solar panels, and typically allow people to invest a few hundred or thousand pounds. Some offer returns as high as 13% a year once you factor in generous tax breaks. Below we highlight some of the schemes currently open for investment.
The UK’s first community energy scheme was the Baywind wind farm in Morecambe Bay, which was launched in 1997. Since then the sector has steadily expanded, and now there are more than 460 community energy schemes whose installed capacity is equivalent to powering about 60,000 homes. But despite this growth, the sector still only represents a fraction of the total energy produced in the UK.
“We believe that if the UK is to move forward apace with its much-needed energy transition, UK citizens need to be put front and centre of the roll-out of renewable energy,” says Ramsay Dunning at Co-operative Energy, which is sponsoring the fortnight. “Community energy projects have the potential to revolutionise the energy market, moving it away from large, fossil fuel generators toward locally owned, cleaner electricity generation sites.”
Most schemes are financed by their members, says Lisa Ashford at Ethex, the online ethical share platform. “Most projects rely either on the co-operative or ‘community benefit society’ model, which allows community groups to raise finance for their schemes through community share offers.”
So what kind of returns can investors expect from a community energy scheme? “While each one is different, you could get anything between 4% and 8% – plus tax relief is available, which helps boost returns,” Ashford says.
While these figures are certainly head-turning in an era of rock-bottom savings rates, you need to be prepared to take some risks with your money – these schemes are not covered by the Financial Services Compensation Scheme.
The bad news is that the government could be about to pull the plug on a vast swathe of the booming community energy economy if its current proposals affecting onshore wind and especially rooftop solar panels become a reality.
Late last month the government outlined plans to scale back its support for rooftop solar by slashing feed-in-tariffs by up to 87%. Ministers are proposing to cut the feed-in tariff for smaller-scale solar installations from 12.47p per kilowatt hour to 1.63p, with large standalone units eligible for subsidies of 1.03p per kWh compared with 4.28p today. So is there still anything to gain financially from installing solar panels on your roof?
“Feed-in tariffs are being cut dramatically for projects after 1 January 2016, but not removed completely, and as the costs of installing solar have fallen sharply they should still give a return on investment,” Ashford says.
However, she advises people not to delay if they are thinking about installing panels. The government’s proposals have clearly alarmed the community energy sector. “It may not have been the government’s intention, but our members are suffering very significant collateral damage from the raft of recent government announcements,” says Emma Bridge at Community Energy England, the trade body that represents more than 180 schemes. “These have already had a devastating impact on a large number of community hydro and solar projects in particular. Some have had to be shelved, others have been put on ice and many more are looking hard at their financial viability.”
However, Bridge, who will be addressing delegates at a community energy conference in Oxford today, believes the sector will survive the government onslaught. “Our sector is robust enough to survive these challenges, not least because of the determination and dedication of the groups who develop community energy schemes. We will bounce back.”
Open for business
• A potential return of 13.6% is being offered by Mapledurham Community Energy, which is seeking an initial £150,000 to help finance the building of a community-owned renewable energy facility on the Mapledurham Estate, a few miles north-west of Reading. Its share offer opened on 24 August.
The projected return is 7% a year on average over the expected 20-year life of the project – but once Seed Enterprise Investment Scheme (SEIS) tax relief is factored in, which allows investors to reclaim income tax on their investment at the rate of 50%, this rises to potentially 13.6%. The minimum investment is £500.
• Another scheme looking for investors aims to raise £2.75m to help finance a community solar project near Bristol. Featured in Guardian Money in June, Chelwood Community Energy plans to install a 5MW ground-mounted solar array on farmland next to the village of Chelwood in Somerset.
The share offer document estimates the total investment return at 9.2% a year over the project’s 25-year life once you include Enterprise Investment Scheme (EIS) tax relief, assuming RPI of 2.5% a year.
“The scheme has been pre-accredited by Ofgem, so it has a feed-in tariff locked in for 20 years and will not be affected by the government’s proposed changes to UK renewable energy support policies,” the scheme’s website says.
However, you’ll have to be quick. Much of the amount sought has been raised, and the share offer is due to close at 5pm on Friday 11 September.
5th September 2015