Top tips for setting up a community solar PV project
Posted by Alex Steeland on 11 May 2015 at 10:15 am
Have you ever wondered how successful community solar PV projects started out? What if you could pick a social entrepreneur’s brain to find out exactly what was involved and the lessons they learned along the way? Well, lucky for you, a new series of action packs has just been launched which aims to do exactly that.
The action packs have been developed by the National Energy Foundation as part of the Academy of Champions for Energy, a sustainable energy initiative running in England, Ireland, France, Belgium and the Netherlands funded by the INTERREG IVB NWE programme. Each pack has been written by a community activist who has first-hand experience of setting up and running their own social enterprise.
The Chairman of Brighton Energy Co-operative (BEC), Will Cottrell, has written a pack on Community-Led Photovoltaic Initiatives. In this pack, Will shares the story of BEC, from its origins as his burning desire to do something about climate change after attending the Copenhagen Climate Change Conference in 2009, right through to performing three successful share issues, raising £700,000 from the community and installing 500kWp solar PV across five sites in Brighton (and counting!). Lessons which can be learned from BEC’s experience include:
1. Finding a team
Press releases, email lists and public meetings are just some methods that can be used to attract interested people. While Will found that many were enthusiastic about the idea, it was those who went away from public meetings and worked on an aspect that was discussed who later became part of the core team. The core team who brought BEC’s vision to fruition had a range of skills and experience in the energy, business and financial sectors, including a professional programme manager and a chartered accountant. Finding the right people with the right skills to drive the project forward proved key!
2. Financial analysis
Building a robust financial model is fundamental. If the numbers don’t add up there is little point pursuing the project. Having a chartered accountant on-board was invaluable at this point to help BEC go over expected revenues and costs, and their implications for cash flow and profit and loss. It is also worthwhile to look at what assumptions your figures rely on and to try to figure out what variables will have an effect. What are the expected outputs of solar PV in different locations? Are those expectations reasonable?
3. Organisational structure
Your project will need a formal legal structure to access funding, sign legal documents and raise capital. The structure chosen will affect decision making processes, whether money can be raised from the public, and how your project functions. The BEC team found guidance from Co-operatives UK particularly helpful at this stage.
4. Start-up capital
Setting up a community energy project can be time consuming. It soon became clear to the BEC team that they couldn’t afford to work entirely for free on the project and that they would need to source start-up capital to pay for set up costs, including printing, hall hires, web support and branding. To do this, they launched a 'pioneer' share offer. Over a few months, the team held public meetings and met one-to-one with local people who expressed an interest in joining and investing in the project. Eight people subsequently bought shares, and BEC raised its first monies: £18,000.
5. Attracting potential landlords
To find a site, try drawing up a target list of buildings with large, good-quality roofs and high exposure to sunlight. BEC compiled a list by asking their local contacts and the public for suggestions. They met with over fifty potential building owners and found that more community-minded organisations were most amenable to the idea. After eight months of searching, they signed up three landlords, including two churches and a local port. A lease agreement had to be drawn up to define the relationship between the project and the landlords, for which BEC received pro bono support from London solicitors Reed Smith.
6. Building your local profile
In order to gain support and attract community investors, awareness needs to be raised about the project. BEC built its local profile through both online and offline marketing: feeding social media with updates, information, stories and pictures, while at the same time contacting local press and talking up community renewables. They emailed many local organisations and offered to speak about the BEC idea. Often groups were receptive: the idea of something new, local and progressive is an innovative addition to a list of meetings and events.
7. Financing your project
Public share offers are a common approach for funding community solar PV; BEC raised £700,000 this way. Launching a share offer will require you to write a share offer document, which is similar to a business plan, setting out the business case and the definition of membership. The business case outlines the proposed activities, and what sort of return members can expect.
Find more tips and inspiration by reading the community-led solar PV initiatives pack here!
More information about Community Renewables on YouGen
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