Solar still FIT for domestic
Solar companies may be in the dumps over FITs but Eaga, the business behind a £300 million funding package to fit free solar PV systems, strategy director John Swinney believes despite the Government's best intentions householders and landlords need to seize the opportunity.
Under the programme there is no cost to the resident or landlord, and with a 'fit-and-forget' concept all the maintenance and aftercare is provided by us.
We already work in partnership with seven housing providers and we are in advanced stages of negotiation with several more.
Securing this solar project funding takes the programme to an entirely different level.
As the first and largest agreement of its type it also sets us apart as the leading independent energy services provider able to deliver such public-private partnership models at scale.
Indeed, leveraging private sector investment to deliver public sector policy in this way is a cornerstone of the Government's agenda over the next decade as we move to initiatives such as green deal.
To briefly address the funding structure, the finance consists of equity totalling £75 million which will be invested in a newly created Special Purpose Vehicle Company (SPV).
Within this SPV Eaga has invested £15 million, while £30 million each has been invested by HSBC Environmental Infrastructure Fund and Barclays European Infrastructure Funds.
Debt financing of £225 million will be provided by a syndicate of five major banks; HSBC, Lloyds, National Australia Bank, Santander and RBS.
By working in partnership with social housing providers, the financing arrangement allows the householder to benefit from the free electricity by the solar energy, while we and our equity partners receive the income from the FIT over 25 years.
Focusing partnerships on social housing providers means that many of those who benefit will be householders who are most likely to struggle with higher energy costs.
The social inclusion element of this initiative is extremely important - after all if we are going to make the shift to low carbon living and greater energy security it is crucial that all households can benefit, regardless of their ability pay.
The results of our programme speak for themselves with residents telling us that on average they are seeing energy bills drop my a third or more. Those on pre-paid metres are also noticing the metre clocks slowing down immediately, which is fantastic news for cash-strapped households looking to manage rising costs.
Interestingly, there is also evidence that people are changing their behaviour in a more environmentally sustainable way by using electricity when it is free and from a renewable source.
Surely this is a development we should all welcome. From a purely altruistic perspective it is also something we should encourage wherever possible.
Perhaps the real strength of this funding is that it offers partnership at its core. Of course, organizations will choose the path they feel best suits them but as a provider of what is a "risk free" model we are confident it meets fully the needs of social housing providers.
It is worth considering that for housing providers there is no initial capital outlay and you can hand over the logistics to a partner with 20 years experience in energy services and full industry accreditation - a cost and delivery benefit which cannot be overestimated.
Eaga's solar programme is a genuine end-to-end service, managing all aspects of the value chain including survey, supply, install and full aftercare.
Moreover, the prevailing financial climate makes a compelling case for private organizations like us and the public sector such as local authorities to do things together.
Our proposition is all about collaboration, on sharing rather than competing for scarce skills, resources and funding.
It can also be about engaging with communities where we are installing solar panels, or other energy efficiency upgrades, and, including exploring the opportunity for creating local green jobs.
At the risk of sounding clichéd, this £300 million Solar Project ticks all the right boxes and as the first it already has a successful record of delivery.
The Government's recent review into FITs has also come out in strong support of the small scale micro-generation approach that it adopts.
Finally, with funding sufficient for around 35,000 households I would urge housing providers to act now before the opportunity is lost.