Community Energy - Resources & News
Take a look at Setting up a community enterprise & share offer scheme resource library on the Low Carbon Hub website - it's full of practical advice and useful information.
See the Community Power Services Group (CPSG) community projects in Canada: Howard Johns, Ovesco Director, recently met with the CPSG who said OVESCO had inspired their share issue.
CPSG video clip on community energy
Get a free printed copy of The Rough Guide to Community Energy - Ovesco is featured in it!
To help other communities set up their own projects we have produced the simple guide below. Ovesco is seeking funding to help community groups in the South East develop their own projects and we will post news about future events once we have the resources to do so. We want to see community energy projects developed all over the UK as part of the work Transition Towns and other groups are doing to improve the future energy efficiency of communities and generate local decentralised heat and power. For more information on why we should decentralise power go to these links Decentralising Power, Zero Carbon Britain and Repowering Communities.
General information on setting up a Community Energy Project:
- Form a Local Energy Group: This can be done by holding an event such as an Open Space Day about energy efficiency and local power generation for the future. You might have a Transition Town Group, Low Carbon Group or a Parish Council already in place and willing to support the development of a project.
- Decide on a Legal structure: Any project will need a governing body of some sort to manage the project. For information on legal structures visit PlanLoCal and Co-operatives Uk web sites. You can get help with the rules for setting up an Industrial and Provident Society from Wessex Community Assets. Look at web sites for information on what other communities have done such as LCWO, TRESOC, ONCORE and BEC. The Ovesco web site will have a link to our share issue documents and you may find this information useful as a guide for your own project.
- Survey your community: Your community will need one or more potential sites for a project. Use local knowledge and support from your council to draw up a map of potential sites for heat and power generation or energy efficiency measures. Once you have identified the sites you will need to contact the building or land owner to see if they are willing to work with you as a project partner.
- Support from an Installer: Once you have one or more sites indentified and a building or land owner as a partner you will need one or more installers to advise you and quote for the installation of you project. If you are using the Feed-in Tariff (FiT) or the Renewable Heat Incentive (RHI) you will need a Micro Generation Certified (MCS) accredited installer. You will find a list of MCS installers and products for microgeneration on the MCS web site. There are organisations such as the REA and Solar Trade Association, who may be able to help advise on installers for community energy projects. Ovesco has some installers based in the East Sussex area on its web site.
- Project team: At this stage you will have a legal structure in place, group working for your community, a land/building owner and your installers in place. With a site and a quote for work you will be in a position to check the project is financially viable and can be maintained, before raising any capital or applying for planning permission. You will find it useful to work with someone with accounting or book-keeping experience to make sure your figures stack up.
- Planning: In most cases you will need to apply for planning permission. You can find out more about a planning application through your local council. In some cases (wind turbine, micro hydro, AD and biofuel) you will need additional assessments, such as an Environmental Impact Assessment. At this point you will need some capital to proceed.
- Structural Survey: When you are considering applying for a planning application you should also consider a structural survey. In the case of simpler technology such as PV panels this may only require a structural calculation for a roof and a roof inspection to check the roof is in a fit state for fitting the PV panels. More complex technology such as micro hydro will require more in-depth plans, which your installer should be able to advise you on.
- Finance: There are various ways to obtain finance which could include donations, grants, loans and share issues. If you have a grant make sure State Aid Rules allow you to access the FiT or RHI – contact DECC for more information about this. Without an asset you may find it difficult to obtain a bank loan. If you approach a bank for a loan, you might want to consider an ethical bank. Some community groups are considering aggregating projects to access larger loans, which tend to be more attractive to banks when taking into account the loan fees. There are loans for community groups via organisations such as PURE and Finance South East. Loans are all about risk, and risky projects will require higher interest rates. We are all waiting to see if the Green Investment Bank will be a source of loan funding for community lean energy projects.
- Legal: At some point you will need a solicitor to draw up legal documents such as a lease. This will require some capital and it is unlikely you will be able to avoid this expenditure on legal fees for a good lease. You may find one or more community groups willing to recommend a solicitor they have used and some will promote companies on their own web sites. Most community groups who have a lease (including Ovesco) will not pass on their lease as they have been advised it is site specific and not a generic lease for all sites.
- EIS and the FiT reviews: Your investors may be able to get tax relief via the Enterprise Investment Scheme (EIS) and you should contact HMRC for more information about the current state as renewables are going to be removed form EIS, but recent legislation may mean community groups can still access EIS. You may find the information about EIS on the REGENSW web site useful. The Solar Trade Association and Friends of the Earth have been lobbying for EIS to remain in place for community energy projects and for government not to reduce the FiT for community groups. It is important for community groups to sign up and support these organisations if they want to see community renewables succeed financially. The ultimate aim is to achieve grid parity, where renewables are on a level playing field with heat and power sources from coal, gas and nuclear power. Incentives such as the EIS, FiT and RHI allow communities to achieve this and take some control of their own power generation.
- TAX: Community groups will have to consider payment of corporation tax, business rates and VAT. Ovesco had to register for VAT, because VAT is 20% for a commercial renewable energy project. All this involves paper work and requires someone in your group to take on this work. Ideally this person should be paid and the cost of this work included for in your business plan.
- Power Purchase Agreement: If you are generating power that is going back into the grid you will need a Power Purchase Agreement. Ideally you will want to see to one of the green energy companies. The current standard export tariff is 3.1p per kilowatt hour. By approaching a good supplier of electricity you should be able to get a bit more per kilowatt hour. Supporting the best green energy companies will mean greater support for local decentralised power in the long term. Some of the green power companies want you to support them with new customers and may offer a small incentive for doing so. Local United is working on gathering together a number of community groups to get a good rate for the power they generate and community groups could consider supporting this.
- Insurance: There are a growing number of brokers for insurance in the renewables field, but quotes vary and it is important to seek more than one quote for your project. Existing groups may be able to advise on who they used and some may promote these companies on their web sites.
- Maintenance: Once your project is completed you will have to maintain it and check the heat and power generated. All projects will require your installer to provide you with an operations and maintenance guide and may agree to enter into a maintenance contract with you. In the case of the Harveys PV project Ovesco monitors the PV panels with live data from the inverters and takes periodic meter readings. There will be twice-yearly inspections of the PV panels to ensure they are kept clean and working efficiently. The FiT and investment in the project may be for 25 years, so this means any community group needs to manage their project or contract someone to do this work for them. At the end of the project's life there will be a need to consider removal of the installation or maintenance for the longer term.
The above is only a rough guide to some of the FAQs Ovesco is asked by community groups. With funding we hope to build on this guide for the future and act as a hub in the South East for other community renewable power projects. Please e-mail Ovesco at hello@ovesco.co.uk, if you would be interested in attending a conference about community power generation. The directors of Ovesco are not experts, but we feel the knowledge we have gained since setting up in 2007 is something we want to share where possible and to encourage other community groups to work together to achieve a low carbon future.
Transition Network: www.transitionnetwork.org
The Transition Network helps communities deal with the future impact of energy depletion and the inevitable rise in the price of commodities (peak oil). This process, which we call Transition, aims to create stronger, more resilient communities.
Transition Town Lewes: www.transitiontownlewes.org
Transition Town Lewes is a network of Lewes people. We’re working on local solutions in response to the global problems of climate change, economic change and the end of cheap energy and other resources.
The Solar Trade Association – Promoting Solar Energy in the UK: www.solar-trade.org.uk
The Solar Trade Association represents the interests of its member companies, made up of UK based Solar Electricity (PV) and Solar Thermal (solar hot water) companies. The association works to promote the uptake of the technologies in domestic, commercial and industrial applications and promote the Association & technologies through our website; at local & national trade events as well as through our annual publication: The Solar Handbook.
Renewable Energy Association: www.r-e-a.net
Good Energy: www.good-energy.co.uk
