Energy Saving Trust Community Services Manager, Graham Ayling, discusses the importance of recent rulings which could have big consequences for the future of community owned renewable energy projects.
In my work with local communities I’ve had the privilege of meeting some pretty inspiring people. After years of hard work there are signs that community owned renewable energy is at last taking off with solar projects in particular springing up across the country. I think that this could be the start of something huge, if its given the chance.
However, recent rulings by the Financial Conduct Authority (FCA) are threatening to derail all that progress. While the Department of Energy and Climate Change (DECC) is introducing new support for community energy projects (for example, the Urban Community Energy Fund), the FCA has stopped registering one of the most common models for community energy projects and may de-register some of the UK’s most successful community energy social enterprises.
Alongside this there will be a change to the tax relief regime for community energy share issues, with no clarity over how that transition will happen. Add to this the recent reductions in Feed in Tariff (FiT) support and a planning regime that seems unsympathetic to say the least, and you have a potential perfect storm brewing for the sector.
No-one is disputing the fact that community energy, like everything else, needs appropriate regulation to protect investors and ensure a fair and proportionate tax and incentive regime. The problem has been a sudden dramatic re-interpretation of rules targeted specifically at community energy.
Finding a replicable model for community renewable energy has been the holy grail for the sector for a long time. The hard work of pioneering groups is now paying dividends for newer projects able to draw on their experience, using tried and tested models. The changes to FCA policy could set that process back by years and have already stalled community energy projects across the county.
This is a problem that is easily solved. Community Energy England (a key representative body for the sector) has produced a set of common-sense recommendations that address the FCA’s concerns whilst enabling the sector to continue developing. Essentially what the sector needs is some consistency to develop models that work, then share them in the knowledge that they won’t suddenly become obsolete due to arbitrary rule changes.
The community energy sector could have a transformative effect on the way we generate and use energy in future. It inspires and engages people with energy like nothing else. It empowers people to be more involved with how and where their energy is generated and used and enables local people to share the economic benefits of the low carbon revolution.
The growth of the sector so far has been driven by a spirit of co-operation, thousands of hours of volunteer time and huge reserves of generosity on the part of pioneering groups. If the sector is going to fulfil its potential it has to be able to stand on the shoulders of those giants. Here’s hoping common sense will prevail.
What do you agree with Graham? Let us know in the comments section below or get in touch.