Subsidy cuts threaten £369m of community energy projects

Up to 90% of community energy developers across the UK say that proposed cuts to the Feed-in Tariff (FIT) would put their current projects at risk.

£369m of total capital investment is at risk thanks to the FIT review

£369m of total capital investment is at risk thanks to the FIT review

In a poll of 80 community energy companies, 67% thought their projects were ‘completely’ at risk, and 23% said they were ‘partially’ at risk due to the FIT review.

This represents a capital investment of £127m that is now unlikely to go ahead. Looking forward, 91% of developers said their future ambitions are also at risk from the FIT review representing another £242m.

Trade group Community Energy England, which carried out the survey, said that community energy could deliver a range of decarbonisation and economic benefits, but needed Government support in the short term.

The group’s chief executive Emma Bridge said: “Community energy is about far more than the generation of renewable energy. It reduces energy bills, provides energy efficiency advice, develops skills, and generates revenue in the local economy; the list of social, economic and environmental benefits goes on.

“To continue to do this, at least in the short-term, we need support from schemes such as the Feed-in Tariffs. Community energy delivers value for money and this value will increase as the sector matures. The proposed changes to FITs will seriously damage the community energy sector.”

The report comes the same day as Energy Minister Andrea Leadsom is due to face questions in Parliament over whether Government policy is damaging investor confidence in renewables.

Value for money

According to the survey, just under half of the 80 companies had received funding from the FIT, totalling £7.4m. That initial investment has reportedly leveraged another £50m private investment and £45m in revenue for local communities.

A report earlier this week found that community-owned renewables projects were one of the most popular sub-sections of the booming ‘positive investment’ market, with 48 community share offers raising £26m in the past year.

A separate report from clean power provider Good Energy also sought to dismiss the Government’s claims that the cuts would keep energy bills down. The report claimed that renewables helped lower the wholesale cost of electricity, and thus their impact on energy bills was significantly less than the Government claimed.

Community energy has been vocally supported by energy ministers in Wales and Scotland and the new shadow Energy Secretary Lisa Nandy.

The decision on the FIT review – which seeks to cut subsidies by up to 87% - is expected at the end of this week (23 October).

The solar industry is also being hamstrung by the proposals, with more than 1,000 jobs lost in the last two weeks, as developers and installers go into administration. 

Brad Allen


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