The move aims to address what the two organizations see as a key market failure in the UK energy sector – how to facilitate community ownership of solar farms in order to maximize the social, environmental and financial impact they generate for their local area. The first move has to been to purchase the Newton Downs solar farm in Newton Ferrers, near Plymouth, from renewable electricity supplier Good Energy.
The Community-Owned Renewable Energy Partners (CORE), which is the vehicle for the partnership, will now begin to transition the site into the hands of Yealm Community Energy, ultimately generating an expected income in excess of £1.4 million ($1.9 million) for local community organizations and projects over the lifetime of the solar farm. CORE is aiming to acquire 6-8 solar farms over the next 12 months with a view to maximizing the benefits for local communities. Community groups will be given up to three years to raise the necessary funding.
The partnership between Power to Change and Big Society Capital was originally set up in response to the Government’s reduction to feed-in tariffs which curtailed the development of community energy solar projects. A further challenge arose to the community energy sector when the enabling legislation, which was to provide for the transfer of 5 MW solar farms such as Newton Downs from the private sector into community ownership, failed thus curtailing the benefit to local communities.
Power to Change, an independent trust supporting community businesses in England, already has a successful track record of funding local community energy businesses, from solar to wind to biomass.
“We are really excited to be investing part of our endowment in community energy assets in this pioneering approach in partnership with Big Society Capital” said Power to Change Chief Executive, Vidhya Alakeson. “We believe this to be one of the largest ever mission-aligned investments by a UK foundation. By getting further involved in this sector, Power to Change is demonstrating how community businesses are stepping in to address market failure and creating assets that really benefit their communities.”
Jeremy Rogers, Chief Investment Officer at Big Society Capital, added that locally owned energy can help to generate long-term revenue streams for local issues, such as fuel poverty.
CORE Partners is being advised by Environmental Finance and is now seeking to acquire any solar assets from developers or investment funds where the local community already demonstrates a keen interest to take ownership.
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