A closer look at how to finance community projects
Financing community projects can seem daunting at first. Projects with several stages and different amounts of funding will require a significant amount of advance planning to make sure the project is feasible, but thankfully there are various different options to help aid this process and financially support local projects.
There are several government level grants and loans specifically designed to help fund community based projects. Keeping a look out for local financing opportunities is a good idea, as many councils have set aside pots of money for this purpose. Any applications should be carefully reviewed, as there are an excess of projects requiring funding at any given point.
There are many sources of finance to help support community energy specifically. Glasgow Community Energy is a community solar energy project and GCE has received funding through various different methods. This has included a Scottish Power Energy Networks (SPEN) grant through the Green Economy Fund, a fund supported by Scottish Power to specifically work with smaller communities and provide access to funding for projects that may have struggled to finance otherwise.
GCE were also successful in applying for a CARES loan. CARES is the Scottish Government’s Community and Renewable Energy scheme that was created to provide financial support to local energy projects. The CARES scheme includes an Enablement Grant of up to £25k, designed to get renewable energy projects off the ground, funding start-up costs such as feasibility analysis and community consultation. The CARES Development Loan is then available to take forward these plans created in the initial stages, including a write off facility to mitigate development risks. Finally, the CARES Innovation Grant is available to help progress particularly innovative community energy projects. This is managed by Local Energy Scotland, who also provide advice, toolkits, case studies and other online resources for communities.
In addition, GCE is working in conjunction with Energy4All, a non-profit organisation that helps to fund local energy projects. Energy4All have helped to develop 27 community energy projects, with more in the pipeline. They create co-operatives by working with communities to develop renewable energy projects. Energy4All provide help and support all the way through the project by helping applying for funding, finance modelling, hiring a project manager and issuing a share offer to raise the capital required for the project to be successful. Local people invest by buying shares and receive annual interest payments in return. This effectively means that the members, those who have invested, therefore own the project. In theory, once the capital is paid off the project will at this point be making money. Along with some regular maintenance costs, the fees will be paid and the interest paid off to the members, the remaining profit is issued to deserving local projects. This is known as a community benefit fund. A good example of an Energy4All project is the Edinburgh Community Solar Co-operative. People from across the UK invested over 1.4 million to install PV solar panels on 24 different buildings across Edinburgh. Every year this generates 1.1 GWh of clean renewable electricity, saving over 1000 tons of carbon dioxide. Through Edinburgh’s community benefit funds, the co-operative have already supported five different local projects.
Guest blog by Zoe Dickson