New Government Scheme to Encourage Communities to Invest in Renewable Energy

A new scheme to encourage investment in renewable energy has been launched- Rachel Hemsley explains how it might mean more of us can benefit from cleaner energy in the future

renewable energy

Many individuals would like to invest in renewable energy for their homes; however it often involves a large financial commitment over 20 years or so – even it if it does eventually result in a profit for the investor (based on government schemes such as the feed in tariffs). This means that those who have the financial capital readily available can benefit from the return on investment and the reduction in energy bills with their power usage being subsidised through the renewable energy they create themselves. However, those who are most in need of a reduction in fuel bills, are likely going to be the least able to afford such schemes, hence why the recent introduction of community based renewable energy schemes is such a positive step- it allows for renewable energy investment on a larger scale with little investment from the individual.

Community Renewable Energy Schemes

On 27th January 2014 further plans were announced regarding community energy schemes, most notably the Urban Community Energy Fund (UCEF) which consists of £10 million to help facilitate urban communities’ investment in renewable energy. Earlier last year there was an equivalent scheme established for rural communities.

This idea of community investment has proven practical in the past with upwards of 5,000 communities establishing their own energy projects since 2008. Brixton Energy is a great example of an urban community utilising government schemes before there were ones specifically aimed towards them; they installed solar panels across south London council blocks and the profits made from the feed-in-tariffs went back into the community.

If these kinds of initiatives were to become commonplace the hope is it would help to diversify Britain’s energy sources and therefore pressure energy companies to lower their prices. It has even been estimated that by 2020 such local community projects could create enough electricity for 1 million homes.

How it works

Both rural and urban community energy funds work on the same premise; there is an initial grant to assess how feasible the proposed project would be (up to £20,000 in the UCEF) and then if the project is given the go-ahead, there is a loan available to help with planning applications and aid stimulation of further investment in said project (up to £13,000 in the UCEF).

An important aspect of this scheme is the community ownership, meaning that even though there may be outside investment the ownership will at least partially be the community’s – ensuring the local individuals reap the benefits both financially and socially if their area invests in such a scheme.

The type of renewable energy resource a community should look to invest in will vary greatly depending on space available, in urban areas solar panels are ideal of the tops of buildings whereas rural areas generally have more ground space and therefore more options. Ground source heat pumps in Norfolk and other rural areas are often preferred because of the land space and the lack of disruption to the view; solar panels and wind turbines can be unpopular with rural locals because of their appearance and potential to negatively affect tourism.

By Rachel Hemsley

Edited by Helen Kinsella

Image sourced: John R

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