The upgraded Urban Community Energy Fund fund will offer grants of up to £20,000 and loans up to £130,000.

A government statement points out that whole communities can save money by installing solar panels on local buildings or building an anaerobic digestion plant to create energy from local waste.

Making the announcement on a trip to a solar-powered brewery in East Sussex, Davey said: “I want to give more people the power to generate their own electricity and by supporting community energy projects we can – helping them drive down their energy bills at the same time.

“That’s why we’ve pledged £10 million, so communities can play their part in generating renewable power at a local level. This is all about investing in renewable energy sources, creating jobs and changing the way renewable energy is developed in the UK.”

Ch-ch-ch changes

Davey also announced the first major changes to the community energy scheme since its inception in January of this year.

– Community electric projects will now be eligible for Feed-in Tariffs (FITs) – a scheme which pays the owners of small-scale renewables for the electricity they produce.

– For the first time, registered charities will be entitled to the same benefits as other community groups

– The FIT will now be guaranteed for an extra six months – giving communities more time to get their project up and running

– Two community projects (or one community project and one commercial project), each up to 5MW, will now be able to share a single grid connection and receive separate Feed in Tariffs

Industry reaction

The Renewable Energy Association welcomed the ‘grid-sharing’ decision , saying that it effectively doubles the size limit for those small projects. For example, a solar farm 50/50 owned by a commercial developer and a community group can now be up to 10MW in size, instead of the usual 5MW limit.

REA Community Engagement Adviser Gaynor Hartnell said: “This creates a powerful incentive, especially for solar project developers, to co-develop schemes with community groups, in just the scenario Ed Davey envisaged when the Community Energy Strategy was published.

Last month, ethical investment exchange company Ethex found that renewable energy projects are the most popular type of community investment, with £29 million raised for 56 projects since early 2012.

Likewise DECC’s recent public attitudes survey revealed that public support for renewable energy remains high at 78%.

Brad Allen

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