Chester Community Energy Ltd started life as the energy working party of Transition Chester, the local group campaigning for a transition to a low carbon economy. They gave us a loan of £300 to set up a Community Benefit Society and so we were ready to go!
The founder directors were an environmental economist, a retired engineer and retired architect with a solicitor as company secretary, so we thought we were well qualified but still faced many challenges in the months and years ahead.
We had contacts in the Cheshire West and Chester Council and with a nearby community energy organisation, Low Carbon Lymm, who provided great help by pre-registering our first project for Feed in Tariff (FIT). From these discussions we came up with an idea for the first project: a 50kW capacity solar array on the roof of a leisure centre near the centre of Chester.
Having been successful in getting development grant aid, we went through the process of getting detailed layouts, tenders, leases, power purchase agreements, a business plan, registering for VAT and issuing a share offer: a huge learning curve for all of us. There were a few nervous moments as we watched the share funds coming in just before our deposit to the contractor was due, and as the leases were signed just before they were due on site, but all went well in the end.
The financial success of the project depended on getting the government FIT (then around 12p per kW hour) and being able to sell all of the electricity to the leisure centre for running the many energy-hungry devices involved in operating the centre. We were able to follow the same formula for installations at two further leisure centres near Chester despite the reduction in FIT to around 4p per kW hour, due to the reduced capital costs of the solar panels, however following the ending of the FIT scheme, the financial viability of this type of project is now marginal and depends on larger scale projects. We are involved with a project for a large community owned solar farm on the England /Wales border near Chester and hope that this may be a model for future collaboration on larger projects.
While our initial motivation was to play a part in reducing local carbon emissions, we have also now seen the broader benefits of Community Energy. We now have 90 members who have participated in the running of the organisation and setting our priorities for further projects. We have set up a Community Benefit Fund, now making grants of £5000 each year for projects as diverse as LED lighting, roof insulation and solar panels for a community farm project. The solar PV schemes have given us a reliable income which have enabled us to look at other projects including for LED lighting in community buildings and working with local schools.
Establish a group of enthusiastic volunteers, ideally some with relevant skills, e.g. legal, financial, environmental and project management.
Ask for advice and assistance from other local community energy groups.
Look for potential partners to work with. In our case for these projects it was the local authority and the associated company operating the leisure centres.
Find out about grant aid for development funding. For our first project we were fortunate in getting grant aid from the Urban Community Energy Fund (no longer available) which paid for an external project manager, legal and other professional fees. Our learnings from the first solar PV project were then applied to our next two projects, which did not get grant aid.
Don't underestimate the time and cost involved in sorting out leases for rooftop space or land; and drafting Power Purchase Agreements. Despite having legal fees covered on our first project we still had to spend a lot of time going through documents and resolving potential problems.
Try to find a local specialist contractor with the relevant skills and co-operative and proactive approach. We were fortunate to work with the same company on all three projects, by tender on the first one and by negotiation on the next two. They worked closely with us to work around timescales and arrangements with building managers to produce installations with good performance, on time and on budget.
Get advice on your first share issue (development grant aid helped us with this) and don't hesitate to be ambitious. We raised a total of £180,000, and found that the funds came in on time and we had to close the share offers. We now have 90 member shareholders, many of whom are active in the organisation.
Make sure that you have an effective monitoring system as part of the installation. Essential for keeping everyone informed about progress and highlighting issues before they become a problem.
The installations are monitored by a system installed with the solar PV panels, which can be accessed online, and also has a link to our website. To date 428 Megawatt Hours of electricity has been generated and over 100 tonnes of CO2 emissions saved. In addition the monitoring highlights any issues with the performance of panels. The Feed in Tariff and sale of electricity provides a predictable income which has allowed us to invest in future projects and to set up a Community Benefit Fund, now £5000 each year, to help community groups with their own energy saving projects.
Tonnes of carbon emissions saved.