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Protecting and enhancing the Environment for
Future generations
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Solar PV and Community Energy Companies
Report from the South Gloucestershire Environment Forum Wednesday 12 October 2011
Welcome and Introductions Chair of the Forum, Councillor Dave Hockey welcomed everyone to the meeting and introduced the theme for the evening - Solar PV and Community Energy Projects.
All about Solar PV Alastair Stevens, Project Manager, Severn Wye Energy Agency Alastair gave a presentation to the Forum on Solar PV – outlining what it is, how it works, details of the Feed in Tariff and payback periods, financing options including rent a roof schemes and low cost loans for householders. Alastair’s presentation is appended to this report.
The low interest loans being offered via Wessex Home Improvement Loan is currently up to a maximum of £5k at an interest rate of 4%. The costs of funding the Feed in Tariff are being recouped from customers’ energy bills. In the shorter term, this could cause increased fuel poverty. Consideration is being given to revising the terms of the Wessex Home Improvement Loan to introduce a sliding scale of interest rates according to ability to pay.
Summary of Discussion Alastair clarified that a1kW solar PV system takes up approximately 8 square metres. Roofs ideally need to be in a sound condition before a solar array is mounted on them. It is possible to remove and replace the panels if roof repairs are being undertaken, but there are cost implications associated with this. An installer commented that they do not mount solar panels on pantile or clay tiles, but roof integrated solar tiles are available which can replace existing tiles. The efficiency of solar panels is gradually improving. The maximum efficiency of solar panels currently available is 18-19% (ie the panels convert 18-19% of the solar energy that hits them into electricity). However – more efficient panels are more expensive. FIT payments increase with inflation, with increases linked to the Retail Price Index (equating to a 4% increase this year).
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Solar PV and Planning David Haigh, Natural and Built Environment Team Manager, South Gloucestershire Council David outlined the criteria set in planning policy which determine when a solar PV installation does and does not require planning permission / Listed Building consent in South Gloucestershire. Solar panels can be installed on most domestic properties without planning permission, providing they don’t protrude too much from the roof. However – the permitted development rights are removed for non domestic properties and certain domestic properties eg in conservation areas / Listed Buildings. Where permission is required, applicants will need to demonstrate that any adverse effect on appearance / amenity has been minimised. David emphasised that if an installation does need permission, the householder or community should not be put off. Free pre-application advice is available from the Council.
Community Share Projects Matt Wood, The Converging World Matt gave a presentation on how to set up a co-operative to fund a community renewable energy project. Capital is raised from the community and paid back from the revenue generated by the scheme with an interest rate (depending on the profitability of the scheme). This is becoming a popular way of raising the money for projects in the absence of available grants and for projects not big enough to attract a bank loan. The community ownership can help to build local support for the projects.
Matt’s presentation is appended to this report.
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Community Energy Companies Peter Capener, Chair, Bath and West Community Energy Ltd Peter outlined the steps that have been taken to establish Bath and West Community Energy (BWCE). BWCE has been constituted as a Community Benefit Society (a type of Industrial and Provident Society). In the longer term, they are looking to generate £50-60 million for investment in local renewable energy projects through a combination of bank loans and community shares. BWCE’s first portfolio of renewable energy projects comprises 12 solar PV schemes for schools in the Bath and North East Somerset area. BWCE have secured a low interest loan from Scottish and Southern, and are raising money from members of the community via a recently launched share offer. Shares can be bought to a value of between £500 and £20,000. Each shareholder will have an equal vote in decisions about how the cooperative is run and operates. Profits will be used for bank repayments, to pay members’ interest, to grow the business, and to invest in a Community Fund which will be used for local community projects. Special Purpose Vehicles will be set up under the BWCE umbrella for each portfolio of projects. There may be opportunities to partner with BWCE to develop renewable energy projects in South Gloucestershire – either a single project as part of a wider portfolio, or developing a sister community enterprise under the BWCE umbrella to enable more local investment, ownership and control. The latter option is only likely to be viable for a group of projects in a particular locality or a single more profitable installation such as a wind turbine, where the critical mass is sufficient to generate self- sustaining profits. Peter’s presentation is appended to this report.
Summary of Discussion Small communities in South Gloucestershire tend to have a well- defined identity, and this could increase buy-in to a local share offer to enable local ownership of the project(s). However - to be self sustaining under the BWCE model this would require a substantial amount of investment to be secured. There may be options to group small communities together to help enable this.
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What are the opportunities in South Gloucestershire and how do we realise them? Forum members were given the opportunity to feed back on what development model(s) for community renewable energy projects they believe may be most appropriate in South Gloucestershire, and how they would like to be involved.
• Forum Members are keen to see solar PV installed on schools in South Gloucestershire. Funding and delivery models to enable this are currently being explored by the Council as part of the refresh of the Carbon Management Plan.
• Many of the more rural parts of South Gloucestershire are off-gas areas – where
households could benefit from solar / heat pump / biomass installations to reduce reliance on electricity / heating oil. It would be useful to explore opportunities for communities to collaborate in these areas – eg to enable bulk buying of PV panels or fuel.
• It was suggested that an effective way of increasing take up of solar PV (and other energy
efficiency / renewable energy technologies) is for residents who have had them installed to act as local ambassadors - spreading the word amongst other local residents / friends / family etc. There may be opportunities to work together in this way to get bulk buy discounts.
• Although the ‘rent-a-roof’ models are of most financial benefit to the installer rather than the
resident, they could still have their place in helping to reduce residents’ energy bills (eg for elderly residents who can’t afford to install their own solar panels) and reducing carbon dioxide emissions.
• There are now several community energy cooperatives established in close proximity to
South Gloucestershire – including Bath and West Community Energy, Bristol Community Energy, and Gloucestershire Community Coop. There may be opportunities to establish a similar enterprise in South Gloucestershire (which will be reliant on sufficient community leadership) and / or to work with the existing neighbouring cooperatives. The level of interest could be gauged with an article in the next edition of South Gloucestershire News.
• Local opportunities for renewable energy projects identified:
o Marshfield Community Led Plan – looking to make the links with community
planning and community energy o Church in Chipping Sodbury o Winterbourne PC o Oldland PC o Bradley Stoke PC
Meet the Installer Three local renewable energy installers attended the Forum meeting to answer Forum members’ questions about the practicalities of installing solar PV panels on their homes / community buildings. Their contact details are as follows:
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Genelex Matt and Chloe Rutherford http://www.genelex.co.uk/index.php 01822 600700 Horizon Renewables Robyn Morley http://www.horizonrenewables.co.uk/ 01454 877 661 Sanctus Energy Stephen McNally 01453 828222 www.sanctusenergy.co.uk
Forum Meeting Attendees Calum Allan Home Energy Team SGC Jane Antrobus Sustainability Coordinator, SGC Mary Aze S.Glos Heritage Forum Peter Aze S.Glos Heritage Forum Andy Beecher April Begley Hazel Bleaken Hawkesbury PC James Bond Maria Bowes Env. Rep, SGC Ian Brooks Sustainability Consultant Peter Capener Bath Community Energy Richard Climmer Winterbourne PC Colin Cradock Planet Care, Unity Oldland Methodist Church Norma Cradock Planet Care, Unity Oldland Methodist Church Rennie Dickins Public Rights of Way Team Manager, SGC Andrew Edgington Mark Garland Chris Giles Environmental Projects, SGC Cllr Heather Goddard SGC Cllr John Goddard SGC David Haigh Natural & Built Environment Team Manager, SGC Ron Hardie Oldland Parish Council Tony Harding Friends of the Earth Paul Hemmings Winterbourne PC Cllr Dave Hockey Chair of the Environment Forum Tony Kerr Marshfield Village Parish Plan Group Ian Kershaw Charfield PC Chris Knight Principal Engineer, SGC
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George Kousouros Community Projects Manager Mary Lewis Downend & Bromley Heath Parish Council Richard Lloyd Martin Manning Winterbourne PC Stephen McNally Sanctus Energy Ltd Robyn Morley Horizon Renewables Debbie Paice Home Energy Team SGC Keith Pattison Tracey Price Enabling Projects Officer, Community Care & Housing, SGC Guy Rawlinson Thornbury Town Council John Rendell Deputy Town Clerk/ Premises Manager, Bradley Stoke
Town Council Matt Rutherford Genelex Chloe Rutherford Genelex Stan Sims Jacqueline Sims Alastair Stevens Project Manager, Severn Wye Energy Agency Hugh Soar Bitton Parish Council Veronica Soar Bitton Parish Council Clive Sutton Planet Care, Unity Oldland Methodist Church Mrs Sutton Planet Care, Unity Oldland Methodist Church Jane Thompson SGC Hannah Watts Three Brooks Nature Conservation John Wells Dick Whittington South West ACRE Network Richard Wilson Pauline Wilson Julia Wimbush Downend and Bromley Heath Parish Plan Group Matt Wood The Converging World Cllr Claire Young SGC
Apologies Cllr Brian Allinson SGC Ken Anstey Mike Baker Downend & Bromley Heath PC Stella Beecher Peter & Mrs Billingham Tom Burns Camphill Communities Thornbury Angela Cook Annette Crump Food Safety Enforcement Officer, SGC Ann Fay Anne Fisher Doynton Parish Council Bill Flook Access Ability Group Val Harding Sustainable Thornbury Jerry Harding Sustainable Thornbury
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Cllr Pat Hockey SGC John E Hooper Cllr Sue Hope SGC Cllr Brian Hopkinson SGC Hannah Hough Three Brooks Nature Conservation Cllr Trevor Jones SGC John Laurie Bromley Heath Julia Lawrence Cotswold Edge Sustainability Network Dave Matthews Cllr Bob Pullin SGC Alan Sherratt Community Spaces Co‐ordinator, SGC Allan Taylor Cllr Ben Walker SGC Kieran Warren Clerk to Frampton Cotterell Parish Council Hazel Willmott
Solar PV & Feed-In TariffsSouth Gloucestershire Environment Forum
Bradley Stoke12 October 2011
Alastair Stevens MEng MSc GradEI
SWEA Project Manager
Outline• Introduction to Severn Wye• UK renewables – the big picture
– Small-scale renewable technologies• Solar PV – technology, criteria and options• Feed-In Tariffs: reaping the rewards
– Example scenarios: domestic and community– FIT assignments and ‘rent a roof’
• Other financing options, sources of advice• Questions and discussion
Introduction to Severn Wye • Not for profit company and registered educational charity• Formed in 1999, originally a group within Forest of Dean
DC• Now ~40 staff in two offices• Roots in Gloucestershire – activity now across SW
England and Wales• Promoting sustainable energy and affordable warmth
through partnership, awareness-raising, innovation and strategic action
UK Renewables• Electricity now over 7% renewable – but it has taken
many years to get here• TOTAL renewable energy (electricity, heat, transport)
still at only 3% share• EU obligation – UK needs to reach 15% of TOTAL
energy by 2020 – an extraordinary challenge• Electricity to contribute biggest share – 30% green?• Microgeneration could meet 2% of our electricity –
though the industry believes far more is possible
Small-scale Renewables• Hydro power – reliable, long-term, proven, but
expensive and geographically restricted• Small wind turbines – good in right locations, but
controversial, very site-specific, planning difficulties• Micro CHP – gas boilers that generate electricity – new
tech, easy to retrofit, but unproven• Solar PV – well proven, widely applicable, silent, clean,
straightforward to install and maintain, and now more affordable than ever!
Solar Photovoltaics (PV) • Versatile – PV can be
integrated into roof/cladding, or as bolt-on panels, modular systems
• Usually grid connected, but can be standalone with battery storage system
• Maintenance-free technology, cleaned by the rain
• Long life: retains 80-90% of performance after 25 years
Solar PVTechnical Details•Panel types – polycrystalline, mono-crystalline, hybrid (mono + thin film)•Inverter – converts DC power to grid-synchronised AC power, system shuts down during grid outage•Metering – all systems need a total generation meter (Ofgem accredited); export meter optional•Monitoring – dataloggers, display panels, weather stations all common on non-domestic systems
SolarCollectionFactor• Fairly broad
‘optimum’ range• East-west
systems better on shallow roofs
Solar PVTypical Domestic System• 2 kWp rated capacity• 12–14m2 in area (8-10 panels), located on an unshaded
SE to SW roof• Approx 1,700 kWh per annum – SW has highest solar
incidence in UK• £3,000–£3,500 installed cost per kWp• Some generation even on cloudy days• Feed-in tariffs - get paid for all generated units, even
those you use yourself• Surge in installations since April 2010
Feed-In Tariffs• Also known as ‘Clean Energy Cashback’• The European model: no more capital grants, but a
premium unit rate paid for all energy generated• Enabled by the Energy Act 2008, live since April 2010
(for installations after 15 July 2009)• All mainstream energy suppliers obliged to participate• Tariff levels designed to produce 8% return across
different technologies and scales (but higher in reality)• Funded through energy bills, not taxation
Feed-In Tariffs• Rates are guaranteed for 25 years for solar PV (20
years for other techs) from commissioning date• Rates are index-linked; revenue is tax exempt for
private domestic systems (not for landlords)• Rates will be degressed over time for new entrants• FIT system register and accreditation system run by
Ofgem E-Serve• Equipment and installer must be
MCS accredited for eligibility
Feed-In Tariff Rates – 2011
FIT Example –Domestic
A retrofit 2.5 kW solar PVsystem generating 2,175 kWh per year, of which 50% is deemed exported, assuming an average imported electricity priceof 14p/kWh
Typical installed price: £8,250
Import savings: £152FIT payment (43.3p): £942Export bonus (3.1p): £34Total annual benefit: £1,128
Payback time: 7.3 years
FIT Example –Community
A larger 20 kW solar PVsystem generating 17,800 kWh per year, of which 80% is exported, assuming an average imported electricity price of 12.5p/kWh
Typical installed price: £55,000
Import savings: £445FIT payment (32.9p): £5,856Export bonus (3.1p): £441Total annual benefit: £6,743
Payback time: 8.2 years
Feed-In Tariff Assignments• You can apply to any registered supplier (FIT
Licensee) for FIT payments, not just existing supplier
• Entitlement to FIT payments belongs to the legal owner of the generation equipment
• FIT revenue can accrue to a ‘Nominated Recipient’
• To arrange this, contact your FITs Licensee– They will update the Ofgem central register
Rent-a-Roof Model• Company supplies and installs a ‘free’ solar PV
system on your home – could also be a landlord• You get the free electricity; they become the
Nominated Recipient and they receive the FITs• Some deals require an up-front fee• Offers usually restricted to ‘suitable’ properties• Key issues to consider before signing up:
– See the Consumer Focus guidelines on free solar panels
– Online at consumerfocus.org.uk/g/4lu
Other Finance Options• All grants for solar PV have ended since FITs arrived• Wessex Home Improvement Loans – up to £5k in S Glos
– See www.wessexhil.co.uk/loans.html for available options• Green Deal (Autumn 2012) – flagship retrofit policy
– Energy improvements delivered by private sector– Low interest loan; NO up-front cost to consumers– Measures repaid through charge on energy bill– Expected savings must beat costs (the Golden Rule)– Covers building fabric, HVAC, lighting, microgeneration
• Watch this space for more on Green Deal and ECO
Further Information • SWEA website: www.swea.co.uk
– Renewable energy fact sheets and case studies on PV and other microgeneration technologies
– Installer Network, listing local accredited suppliers– Project information, local green energy events
• Energy Saving Trust advice line: 0800 512 012
• Contact information:– Alastair Stevens, SWEA Project Manager– 01452 835067 or [email protected]
The Converging World
A chance to change the future of our world.
Community Energy Projects
How to fund your project?No grants
Too small for a bank loan
FiTs provide income but no capital
Types of Legal Structure
Industrial and Provident Society (IPS)
Community Benefit Society (CBS, BenCom)A type of IPS
Community Interest Company (CIC)
IPS Share Offers
Raise capital to finance/part‐finance project
Offer shares in the organisation for £££
Members benefit from interest/dividends (profit share)
Wider community benefit (BenCom)
Community engagement and ownership
Examples
Community Power Cornwall Wind1% initially building to 7% from yr
5
Torrs Hydro, New Mills HydroForecast to be 0% for at
least 3 years, then max 7.5%
Ovesco Solar4% from 3rd yr aftergeneration begins
West Mill Wind 5% rising to 12%
*Most share offers are also eligible for the Enterprise Investment Scheme (EIS)
New Mills Hydro
Collaboration between Co‐op, Environment Agency, national park and community group£125,000 investment raised in 2 months
Bath & West Community Energy Ltd
GENERATING LOCAL ENERGY
October 2011
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Bath & West Community Energy?
We are a Community Benefit Society which means:
• Our profits area) Used to pay member’s interestb) Used to grow the businessc) Paid into a Community Fund
• Democratic Ownershipa) One vote per memberb) Maximum of 20,000 sharesc) Shares are not transferable
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BWCE’s objectives are to:•generate at least 25% of the local renewable electricity target by 2026, amounting to over 25MWe.
•offer opportunities for local people to invest and generate a good return from BWCE and its projects
•generate a community fund that will recycle surplus profits back into further local low carbon projects
•support local businesses by sourcing goods and services locally wherever possible
•establish itself as a key partner within the delivery of energy efficiency measures through the Green Deal
•develop opportunities to supply (as well as generate) heat and electricity and establish itself as a community‐owned energy service company or ESCo
Objectives
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To be successful we need to • Deliver multiple projects over a long time period
• Generate significant levels of capital finance
• Generate significant sums of local investment
• Retain strong community roots
Success Factors
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The Team
Significant renewable energy experience
Entrepreneurial
Electricity contracting and negotiation
Financial track record
Operational management
Local community project experience
Engineering, Legal, Marketing expertise
History of successful start ups in sustainable energy
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BWCE
Solar Portfolio Site Owner
Lender
Feed in Tariff
Export
Free electricity
Invest & Owns
Loan
Invests & Owns
£
Supplier &Maintenance
CommunityFund
£
£
£
CommunityInvestors
Install &
Maintain
£
£ £
Business model: ‘Build, Own, Operate’
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Our first Solar Portfolio – 400 kW
Site Size kW Site owner Planning status InstallationThe Mead School 49 Wiltshire Council Permitted October
Corsham School 50 Corsham School Permitted October
St Martins Garden School, 10 B&NES Council Permitted October
Lindley’s Farm, Corsham 50 David Walker Permitted October
Walcot Rugby Club 27 Walcot Rugby Permitted November
Newbridge School 35 B&NES Council Permitted November
Oldfield Junior School School
46 Oldfield School Permitted November
Oldfield Infant School 7 B&NES Council Submitted November
St Michael’s Junior School 15 B&NES Council Submitted November
Colerne School 9 Bristol Diocese Permitted December
Peasedown Junior School 45 B&NES Council Submitted December
Ralph Allen School 46 B&NES Council Submitted December
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Will generate 340,000 kWh/year ‐ equal to annual demand for 100 homes
Total cost £1.15mAgreed loan of £1mNet income of £90,000 in year 1 (£110,000 in year 5)Return on investment of 9%Aiming for member return of 7%Tax payers can get 30% tax refund on investment (EIS)
Solar Portfolio: some headline numbers
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Our mid term plans ....
2012• Finance and install a second solar portfolio – up to 600 kW
2013‐2015• 4500 kW of projects: solar, wind and hydro• £11 m raised in debt and equity• Paying interest of 7% to members• Approx £275k/year to Community Fund• Develop energy efficiency projects – e.g. Green Deal
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Community Partnership via.....1. Membership of community as investors in BWCE
2. Partnership with community in development of projects
3. Development of sister community enterprises able to benefit fromcritical mass generated within BWCE
Community Partnership
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Working in Partnership
Multiple investors £20k maximum. Investment goes
into projects .
Local community enterprise operating as part of BWCE family. Controlling community fund from local
projects.
BWCE – Develop, Finance, Own & Operate
Renewable Energy Projects
Development loan/grant
Local IPS investors
Debt from corporate investors and banks
SPV ‐ Portfolio of projects of same technology invested at
same time SPV owned at least 90% by local
community enterprise
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Could involve BWCE providing development expertise and finance to linked community enterprises through some form of contractual arrangement.
Overall offers opportunity to build a community of communities able to share and influence.
But....•Still some way off •Costs and benefits not worked out in any detail•Needs careful thought on all sides •Is it worth pursuing?
Building a community enterprise ‘group’
