Successful partnerships between local authorities and communities can deliver large scale solar
Climate change is high on all of our agendas at the moment, with around two-thirds of Local Authorities now having declared climate emergencies, net zero targets being set by businesses and councils alike, and the campaign to ‘build back better’ after the pandemic getting widespread support.
There’s never been a better time to think global and act local. Community energy groups and Local Authorities can share resources and collaborate to successfully deliver renewable energy projects that benefit both the public sector and the communities they serve.
Community groups have been successfully developing and building solar parks for several years and, after a break following the withdrawal of government subsidies in 2017, such projects are becoming viable again. As Community Energy England highlights in its 2020 State of the Sector report (published for Community Energy Fortnight) the sector will need to identify and develop new business models, ownership schemes, and technologies in order to thrive in the new post-subsidy world.
Working alongside a Local Authority can make it possible to scale up to a larger-scale scheme and make a profit. Public Power Solutions is a solar development company wholly owned by Swindon Borough Council. We pioneered finance options in this sector, successfully delivering two large scale community solar schemes in Swindon.
Common Farm solar park, which energised in 2016, is a 5MW scheme funded by a blend of public and community investment. The public were invited to invest in the project via a community energy bond, launched through investment platform Abundance.
Chapel Farm solar park energised in 2017 and was funded in a similar way using a blend of public and community funding via council-backed solar bonds which were eligible to be held in an Innovative Finance ISA. The public could invest for as little as £5 with an annual return of 6% for 20 years. These offers proved extremely popular and take up was so high that the schemes closed a month early!
Not only are investors earning a healthy return, the local communities benefit from funding pots which pay 65% of profits to support local initiatives (for example to fund play equipment or local sports clubs) with the remaining 35% profits going back to Swindon Borough Council.
Since the completion of these projects, government subsidies are no longer available. However, it is still possible to deliver a profitable scheme due to the reduction in construction costs over the past few years. Recent studies have shown that alongside onshore wind, large-scale solar is the cheapest form of new energy generation for two-thirds of the world’s population. Coupled with the reduction in energy usage due to the lifestyle changes we have all been forced to make during lockdown (and are likely to continue with as the ‘new normal’) this is great news for the future of solar
A key component in a successful community energy scheme is a high level of public consultation. Being open and honest during this stage of planning and inviting local people to share their view allows them to engage with the project from the outset. The opportunity to invest empowers communities to take control of their own energy generation. This in turn can lead to a more thoughtful use of energy, reducing usage and carbon emissions .
Many Local Authorities have access to funding and own land or other assets which are suitable for solar development. By working with a community group on a joint venture, they can deliver a project that can benefit themselves, their fellow investors, and their net zero aspirations.
Not every piece of land is suitable for solar. Requirements include a good grid connection, favourable planning, and leasing arrangements. To find our more, get in touch with us.
Richard Sansom, Head of Business Development, Public Power Solutions Ltd