What is Community Energy?
Community energy projects are the coming together of a local group to raise funds and build renewable energy installations for the good of the community.
The community benefits from the revenue generated and can choose how they spend the income after operating costs and bondholders have been repaid. This is often spending on local facilities, helping people in fuel poverty, conservation projects, or even more renewable energy installations on village halls, social clubs, schools, etc.
Why set up a community energy project?
Community energy groups are much more than a way of generating zero-carbon energy. They are a way of bringing a community together for the common good and giving a good return on investment for local bondholders who want to invest. They are a way people can get involved in making their community stronger by having a common focus as well as raising money to spend on things they want, rather than having to rely on external funding sources, such as local authorities, grants, etc.
The same energy that often comes from a local pressure group resisting a new housing estate, road, gravel extraction project, etc. can be harnessed for something positive for the whole community.
How do you set up a community energy project?
Setting up a community energy project can seem quite daunting. Where do you start? These are the basic steps you need to go through. There’s quite a lot to think about, but we have done this a few times before and can help you through it.
- A core group comes together to talk about the idea in principle. This is often seeded from an existing group such as the WI, Parish Council, residents committee, local environmental group, etc.
- Someone experienced in Community Energy comes along to the group and talks through the concept. This can be someone from an existing project somewhere else in the UK or we are happy to come along and give you our thoughts. Just drop us an email and we’ll try to help
- Based on the outcome of the meeting, the group goes out and looks for potential sites: slightly sloping south-facing low-grade farmland, south (or east/west) facing roofs of public buildings, warehouses, etc. Ideally, it needs to be somewhere that already uses a good amount of electricity, such as a factory, dairy, warehouse, processing plant, office block, etc. The ground needs to be free of flood risk. and with no planning constraints (such as an SSSI, Heritage area, etc.
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- Determine the ownership of the land or property and approach them about the possibility of a community-owned solar PV installation.
- Commission a desktop feasibility study looking at likely costs and revenues.
- Form as a legal entity: A Co-operative or CIC (Community Interest Company) works best.
- Look for grants that may be available to help the project.
- Investigate possible power purchase agreements (PPAs), option lease on the property or land, DNO connection, landlord agreements, etc.
- Apply for outline planning permission
- Raise finance. This is normally in the form of 5-7 year bonds, at about £500 – £2000 each. That gives a good spread of options for people in the wider community to buy a share without being reliant on just a few richer investors.
- Get planning consent
- Engineering procurement and contraction tender
- Build installation
- Run the community energy organisation.
- Invest the surplus generated in local projects as decided by the Co-op or CIC.
Don’t try and do it on your own! It’s quite a bit of work, but there’s nothing new. It’s all been done before, and when you first see the money coming in from your own clean renewable energy power station, it’s all worth it..