Community solar's vital role in energy security

When Prince Charles delivered the Queen’s Speech to Parliament this week, few were surprised at the references to the cost of living crisis and the growing threat of climate change. We were pleased, however, to also hear it refer to the need for a new UK Energy Bill and highlight the need to encourage the update of heat pumps to help drive the UK’s clean energy transition.

The speech comes on the heels of the government's release of their Energy Security Strategy report that outlined (in terms that were vague, to say the least) their strategy to maximise ‘homegrown energy’ opportunities to help improve the UK’s energy security. 

A secure energy system is something we have usually taken for granted. You flick a switch and the lights come on. But the culmination of recent events both nationally and globally has shone a light on the need for the UK to re-think how our energy supply system works and look at ways we can improve and strengthen it.

For many households, the key concern is rising energy bills. In recent months, households have faced a steep increase in their energy prices. This is due to supply and demand on the global wholesale market which, along with the price cap increase, has caused the amount we pay for our gas and electricity to soar. This is an issue for our energy security because, put simply, if we can’t afford to use our energy, the system cannot be secure for all.

These problems have of course been exacerbated by the conflict in Ukraine and the uncertainty of Russian gas supply to the rest of the world. Uncertainty causes panic which, in turn, causes price hikes.

Another factor to bear in mind is our reliance on electricity from the grid. In the past, our electricity grid has been stable enough to cope with the demand placed upon it, even during times of high demand and fluctuations. However, as our society moves away from gas and fossil fuels the demand for electricity is set for steep growth. And it’s unlikely that our current grid supply network can meet this need as it stands.

Weighing up our options

While it is good to see the Queen’s Speech and government starting to address the issue of energy security, we know that further urgent action needs to be taken in order to facilitate the clean energy transition we need to help us reach our net-zero goals.

There are several key areas that should be considered as part of the energy strategy (that currently aren’t being given much weight) such as energy efficiency, retrofitting and on-shore wind, a vitally important sector that is seemingly being overlooked is community solar energy generation.

Community energy schemes offer a number of benefits and allow everyday people to invest in projects that produce clean, renewable energy, owned by the community for the benefit of the community. They are a great way of democratising clean energy production while putting people who demand environmental change in control of the process, moving away from the ‘one way street’ of energy supply and reducing our reliance on profit maximising energy suppliers.

With the right kind of support and funding, the community solar energy model could play an even more important role in the UK’s energy transition, creating cleaner, community-owned energy and generating surplus income that is then channelled back into communities for initiatives that tackle, for instance, energy poverty and other needs. 

Ethex gives everyday people the opportunity to invest in community energy projects, opportunities that not only let them play a part in our clean energy future but also target a fair financial return. Currently, on Ethex, we have two community energy organisations that need vital funding from investors to realise their potential

Sheriffhales Community Energy is a passionate community-driven organisation that runs an established 3.2MW solar array. The successful,community-owned solar array not only provides clean, renewable solar energy but also funds some brilliant local community initiatives in Shropshire.

Sheriffhales Community Energy was formed in 2018 to purchase the established solar array from a commercial renewable energy organisation and bring it into community ownership. This solar array produces enough clean energy each year to power 825 homes and is expected to generate around £1,000,000 over its lifetime to fund local community initiatives, with £150,000 already allocated to local causes. Projects that have already benefited from the fund include the delivery of food parcels to people who need them, vital IT upgrades for the local school and the distribution of low-energy lightbulbs to every home in the parish.

The array also benefits from a government-backed feed-in tariff subsidy, with a guaranteed minimum price for the electricity it supplies to the local distribution network, making this an excellent example of community-owned solar energy generation that benefits everyone!

They need to raise £925,000 to complete the purchase and bring the solar array and its benefits into full community ownership. Investors can benefit from potential tax-free returns of 4% as the bond can be held within an Innovative Finance ISA. The offer has raised over £214,000 in investment from individuals so far but needs to reach its full target for the sale to proceed.

Another fantastic example of community energy in action is Bristol Energy Cooperative who are currently almost halfway to their £2 million target raise on their latest share offer on the Ethex platform. For the past 10 years, Bristol Energy Cooperative (BEC) have delivered groundbreaking community-owned renewable energy installations that benefit the entire community.

BEC is dedicated to harnessing the solar energy generation potential for Bristol and offers free solar PV for businesses, schools and community organisations. They manage a number of active solar arrays that have brought over 9 MWp of renewable energy assets into community ownership to date.   

And it’s not just solar energy, BEC’s projects include Bristol’s first community-owned hydro scheme, microgrids for new housing and groundbreaking battery storage. Their latest share offer is open until the end of June and will earn investors a potential 3.5% return as well as funding some of these pioneering projects, including the installation of solar panels on the Bristol Beacon, creating the UK's first carbon-neutral concert hall.

With inspiring organisations like this, it is easy to see how, with the right kind of funding and support, community energy has the potential to play a key role in the UK’s future energy security. By creating truly homegrown, low carbon energy for local people, that is owned by and benefits the community, we can build a stronger, fairer and cleaner energy system that’s fit for the future.

Investing in community energy organisations isn’t just a way of targeting potential returns of 3 - 4%, but it means your money is working to support these pioneering organisations that are challenging the energy supply status quo and demonstrating how we can achieve a greener and fairer future for all.

Please note that when investing capital is at risk and returns are not guaranteed. Tax benefits are subject to individual circumstances and may change in the future.

Photo by Diz Play on Unsplash