2030
We all know we need to reduce fossil fuel production, but how can we as normal people reduce our CO2 output? Unlike other countries, the majority of renewable energy projects in the UK have been and still are owned by commercial companies. While such companies do make financial contributions to local communities, the sums involved are small compared to what could be contributed from fully community owned projects. The lack of local benefit is one factor that contributes to strong opposition to some renewable energy developments. Until 2010, small-scale renewable energy projects were not viable. The introduction of a feed-in tariff scheme changed this, and provided a market driver for smaller scale community-owned projects. A number of community energy companies were started and they raised funds to install solar roofs on community buildings such as schools. The business model is simple: the community energy company rents roof space through a long-term 24
lease; it finances the installation of the solar roof and receives income from the feed-in tariff and sale of electricity; it covers the operation and maintenance costs from income. The building owner benefits through the supply of cheaper electricity. The investors in the community energy company benefit through a return on their investment. The community benefits since surplus profits are paid into a fund that is available for grants. This model ensures a more resilient local society, not only through the provision of more sustainable energy supplies but also through economic development, since much of the cash generated from the projects flows into the local economy. Community energy is generally funded through crowd funding either via local share offers or through share offers on new platforms such as Ethex,
Abundance and Trillion Fund. The legal structure of a community energy company is normally an Industrial and Provident Society of which there are two forms: a bona fide cooperative or a community benefits society (“bencom”). The difference between a coop and a bencom is that the former trades for the benefit of its members and the latter trades for the benefit of the community. Both have to be registered with the Financial Conduct Authority (FCA) and recently the FCA has refused to register co-ops as community energy companies since the member investors do no trade with the co-op. Bencoms can issue 2 types of shares: withdrawable and transferable. Withdrawable shares cannot be sold to a third party whereas transferable shares can be sold. A share offer of withdrawable shares is not subject to FCA regulation, whereas a share offer of transferable shares is regulated. Both shares always
