Energy4All raises millions for community solar as concerns over future support emerge

Energy4All has raised over £5.5 million for its four recent community share offers, but has claimed that these could be the last to achieve such success in light of recent changes to government policy.

The social enterprise helps communities develop their own renewable energy schemes using a number of different technologies and has said the success of its latest fundraising efforts reflect continued public enthusiasm and strong support for community owned renewable energy.

The projects include the Edinburgh Community Solar Co-operative, which has raised £1.5 million to install solar panels on up to 25 publicly owned buildings in the city. The energy generated by the panels will be used by the council, with all profits generated by Edinburgh Solar to be used to help make the Scottish capital a greener city.

Richard Dixon, chair of Edinburgh Community Solar Co-op and director of Friends of the Earth Scotland, said: “We've been delighted by the public response to our share offer, with more money raised than we were aiming for.  The scheme will get going in the New Year and we expect to put a minimum of £1 million back into community energy projects over the lifetime of the project, so that everyone in Edinburgh has a chance to benefit.”

Energy4All, which is owned by the co-operatives that it helps, also launched its third share offer in November under its Schools Energy initiative. This has already installed solar PV on seven schools in southern England and has raised a further £700,000 to be used for installations on as many as 14 more schools.

As well as solar, funding was raised for a 500kW hydro scheme on the River Devon in the village of Rumbling Bridge, Kinross-shire and a 35kW RainePower hydro project on the River Lune at Killington in Cumbria.

Mike Smyth, chairman of Energy4All, said: “These projects will provide material environmental benefit by reducing carbon emissions and give their members a chance to participate actively in making a positive and constructive response to climate change. In addition they will all provide substantial community and educational benefits for the next 20 years.”

To date, Energy4All has raised over £50 million in capital for community energy projects, but Smyth has expressed concerns that this could become more difficult now that tax relief for community projects has been withdrawn.

The decision to exclude community energy from SEIS, EIS and SITR tax reliefs was announced in October 2015 and came into force the following month, surprising many in the industry who had been told they would receive six months notice if such a decision was made.

“The changes in government policy have created difficulties for the sector.  We have some exciting and innovative projects in our pipeline although it is difficult to know how future community share offers like these will fare without tax relief,” Smyth said.

A number of community projects like the rooftop installations set for Edinburgh thanks to Energy4All’s community funding efforts are also likely to be at risk following government cuts to the feed-in tariff, announced in December.

Smyth continued: “I am also concerned about the longer term outlook particularly for the rooftop solar sector once the existing pipeline of projects is exhausted.  Thanks to the previous system of pre-accreditation our current projects have the benefit of the higher rates of feed in tariff dating from last Autumn which means they are viable although margins are tight.

“The new rates of feed in tariff and other changes to the scheme which the government announced just before Christmas and the uncertainty of whether these rates will actually be obtainable in my opinion will prevent the typical school project from proceeding”.

Rooftop solar projects have benefitted from the government’s decision to bring back pre-accreditation, which will allow community energy developers to agree a fixed tariff rate assuming they connect their project within a year. This was reinstated to support deployment under cost controlling caps announced as part of the new FIT regime. While the caps themselves have been criticised by those delivering community projects, which are likely to miss out in place of commercial projects, some hope remains that these projects will continue despite government intervention.

Speaking to Solar Power Portal back in December, Peter Andrews of Bath and West Community Energy said: “Despite everything that the government has thrown at us, there is still incredible appetite to invest in these projects. The community energy business will not go away, we’re all too established now and we’re hell bent on surviving, and when we ask for investment from the public we are getting it.”