Cuts to subsidies threaten over £100m worth of investment in community energy projects

26th Oct 2015

A new report shows scores of local schemes will be cancelled if planned cuts to the Feed-in-Tariffs go ahead, painting a gloomy picture for the future of community energy in the UK. Plans by local groups to install £127m worth of solar panels and other renewable power at village halls, community centres and sports clubs will be shelved if government cuts to subsidies go ahead.

Of the 80 groups surveyed in the report by Quantum Strategy and Technology for Community Energy England, 55 said they had schemes in development to build small-scale solar, wind and hydro, mainly via share offers. Two-thirds said their projects in development would be put at risk due to the cuts, for which a consultation closed on Friday 23 October 2015.

The report notes that since the Feed-in-Tariff was introduced in 2010, 38 respondents to the survey have received £7.4 million of FiTs which has leveraged over £50 million in further investment, including £28.6 million in community shares.  The 55 organisations with schemes in development were planning to raise £167 million of which nearly half (£90 million) was expected to be raised through community share offers.

The report also points to research undertaken by the Community Shares Unit, a government funded body which works with partners to develop standards of good practice. The community shares market has raised almost £60m in the last five years, with upwards of £20m raised in 2014 alone. Investment in community energy has seen the largest growth and accounts for 70% of all investment in the community shares market and this investment is now under threat.

Hugh Rolo, Locality and delivery partner for CSU labelled the proposed changes by the Government “perverse”:

“‘What’s not to like about community renewable energy schemes? They involve deep community engagement to research and design the schemes, create social structure to commission and install, often involve genuine social investment via crowd funding or community shares to finance, and deliver carbon saving diversified long term sources of energy much of which can be used locally. They reduce dependence on the cartel of big six energy suppliers and on imported gas and oil often coming from places on which to say the least we would rather not be dependent.

The argument is that the underlying technologies are improving so therefore the level of guaranteed income can be reduced ..although it has been noted that nuclear power seems to need a copper bottomed high price guaranteed for 35 years. However it's the savagery of the proposed cuts by 85% which risks stopping such socially, environmentally and economically beneficial movement dead in its tracks.”

The Community Shares Unit and Co-operatives UK has delivered an award winning Energy Peer Mentoring scheme over the past 18 months and the importance of FiTs was highlighted by the 40+ community energy groups in the ‘Lessons for Government’ report.

Co-operatives UK response to FiTS consultation published 23 October 2015

See Community Energy England's response

Make your voice heard: