Last weekend several members of the CREW team attended the Community Energy Conference 2015. Unsurprisingly the FiTs reduction dominated discussions, but CREW left with plenty of optimism too.
Hosted by Community Energy England and Co-operative Energy, the conference was an opportunity for over 50 different groups and co-ops to come together to discuss the state of the sector and opportunities for innovation.
There was a lot of fear and anger in the conference hall as many community groups described the severe impact the rapid FiTs reduction would have on planned projects. The discussion helped draw into sharp focus both how successful FiTs has been in generating a pipeline of hundreds of project across the country (which is the reason given by Government for ending it sooner); and how devastating the announcement will be as group after group explained that they were expecting to ditch their pipeline of forthcoming renewable energy projects because of the cuts.
Among the many interesting talks and useful skills sharing workshops, one of the topics that sparked CREW’s interest was that of Energy Services Companies (ESCOs). ESCOs are a commercial or non-profit business providing a broad range of energy solutions including designs and implementation of energy savings projects, retrofitting, energy conservation, energy infrastructure outsourcing, power generation and energy supply.
A couple of community energy groups have set up ESCOs to deliver energy saving projects in schools and community groups in their local area. These have been primarily focused on replacing all traditional light bulbs with LED bulbs which use on average only 10% of the energy of traditional halogen bulbs and are still more efficient than most energy-saving bulbs currently in circulation.*
One successful example of this is Wey Valley Solar who is on track to help a local primary school in Harmondsworth, near Heathrow, up to 60% on their energy bills following the completion of re-fitting the school with LED lights.
This could be an interesting first step for CREW to start working with local community organisations across the borough while we wait and see what happens to viability of traditional solar projects.
CREW walked away from the conference with a strong sense that whatever happens in the face of current challenges, the creativity and commitment of community energy groups throughout the UK will find a way to bring real benefits of renewable energy to local communities. CREW is equally committed to making this happen for Wandsworth.
On the 27th August the Government announced plans to slash the Feed-in Tariffs (FiTs) subsidy which supports making solar power projects in the UK financially viable. As a result CREW has paused any further project action until the full repercussions of this announcement are known.
The cuts amount to an 87% overnight reduction in the subsidy solar power owners receive for the energy they sell back to the gird.
“From 1 January, ministers are proposing reducing 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”.*
Community solar energy projects rely on FiTs to pay back community shareholders over the life of the solar panels. The FiTs scheme provides a guarantee for community groups like CREW to develop robust financial models that work out the rate of return to pay back investors, and how much money we can contribute to a community benefit fund.
Everyone in the solar industry has been expecting a phased reduction over time in the level of subsidy available. That is the whole point of a subsidy regime – to support fledgling technologies and industries as they develop to the point where they can complete commercially independent of government support.
This announcement is far more severe than anyone was expecting and undermines the viability of all future solar projects in the UK.
CREW are committed to providing renewable energy to the people of Wandsworth. This month we were just about to register with the Financial Conduct Authority as a Community Benefit Society to provide additional reassurance to the community by legalising our structures to operate community share offers.
Until now the plan has been to use any additional financial proceeds gained through solar power generation to channel into further sustainable energy initiatives, discussed and decided by Wandsworth citizens.
We will watch events closely and no doubt adjust our actions to keep doing whatever work we can in the borough.