What could possibly go wrong? – a tale of euphoria, despair and community unity
Well what could possibly go wrong. I was a seasoned energy efficiency and renewables professional. I understood my market, I had weathered the storms of energy policy volatility, the group I had been brought in to support were well organised, with a talented, committed Board of Directors.
Community Energy was riding high. The Coalition Government had come out strongly in support of the concept and on my very first day with Harborough energy Ltd the Chancellor had confirmed that support by retaining tax breaks for investors.
Experienced as I was it was nevertheless a steep learning curve, but then what new job isn’t? As I grappled with Ofgem Pre-accreditation, planning consent, setting up a Community Benefit Society and lets not mention opening a bank account (please! Have you tried to open one recently?) my project was progressing rapidly and then….
Our fist PV potential install host organisation announced that they were restructuring and could not commit to the lease
Never mind, we already had project number 2 ready to go. A 160kW PV installation at a local academy. Every meeting with the school went smoothly. The lease appeared to be no problem, planning consent secured and the cherry on the cake was our highly successful community share offer raise – Whoopee £188,000 in 4 weeks – Euphoria!
But there was one minor fly in the ointment – the Treasury had decided to remove the tax relief for community investment. We had a deadline to finalise all the share offer paperwork by November 30th 2015. We did it! – more euphoria and foolishly we popped a cork to celebrate.
Our second potential install host announced that they were unable to proceed due to internal circumstances – Despair!
We already knew that the Feed in Tariff would be reducing at the end of the year. Could we find a new project and if not, would the new rates mean that it was unviable? Would our investors be prepared to wait?
It took us around 4 months to identify and qualify a new prospect and I am pleased to note that, although we did indeed lose what I would call our professional investors – high net worth individuals attracted by the tax relief, we retained our local investors in a great show of community unity.
We installed solar PV across 4 roofs at Woodnewton Academy in August 2016 with a further 11kW system at a local Health Clinic, Archway House in September. Plans are advancing for further installations and a second share offer this year. It’s been a roller-coaster ride but despite the ups and downs and the swingeing cuts to the subsidy support we are confident that there is still a market and that he future of community energy will be a bright one.
So what did we learn about making community schemes work?
- The most successful community projects benefit from the support of local stakeholder organisations, especially the local authority
- Keep your community engaged – don’t under-estimate the power of social media
- Use a good trading platform – there is enough to get to grips with without negotiating financial rules and regulations – we used Ethex and I can’t recommend them highly enough
- Evaluate and share all of the risks with your potential investors but be prepared for the one risk you never imagined
- Community unity is key – even if you have a smooth ride you need to keep them informed and on side. Ours are already queuing up for new investment
- Never give up – there will be setbacks, there will be tears, there may be sleepless nights but if you keep the faith you will succeed
Denise Marsdon, Community Energy Development Officer