End of Year Review 2015: Community

The government’s decision to roll back support sparked crisis in the community energy sector but also encouraged a flurry of investment before the changes were implemented. Meanwhile, the number of community shops and pubs continued to increase, as did the number and scale of community share offers. And there were new firsts including a community-owned port in Scotland.

A succession of ambitious community energy projects launched throughout the year, including major collaborations between bencoms and councils. In May, Plymouth Energy Community, a partnership between Plymouth City Council and two bencoms, raised £850,000 for solar panel installations. Similar partnerships in Bristol and Edinburgh followed with offers worth £2.8m and £1.4m respectively.

But in July, the Department of Energy and Climate Change opened a surprise consultation on ending pre-accreditation for energy projects applying for the Feed-in Tariff (FiT). Despite significant opposition, pre-accreditation was removed on 1 October.

Later that month, the government announced the removal of Enterprise Investment Scheme (EIS) tax relief for community energy projects, with effect from 30 November. Affected schemes remain ineligible for Social Investment Tax Relief.

Other policy changes, including removal of the Renewables Obligation and changes to the planning system for onshore wind in England and removal of Levy Exemption Certificates were also damaging.

Community energy bencoms began shelving their plans. Repower Balcombe, which had planning permission for a solar farm which would satisfy electricity demand for Balcombe and West Hoathly, said it could no longer launch a community share offer. Its solar farm will be financed through a developer.

The crisis led to a ‘Clean Energy Dash’ ahead of the tax relief deadline of November 30. Some 24 schemes reached their funding targets, including Edinburgh Community Solar Co-operative, Pomona Solar Co-operative in Herefordshire and Rainepower Hydro in Killington, Cumbria.

The chancellor also confirmed that community energy would no longer qualify for Venture Capital Trusts (VCT) or the Seed Enterprise Investment Scheme (SEIS) from 6 April 2016. The government will introduce increased flexibility for replacement capital within EIS and VCT, subject to state aid approval.

Nevertheless, the number of assets financed through community shares continued to increase. There were 93 share offer launches in 2015 as of 14 December, up from 64 in 2014. Their combined share capital target was £58m, compared to £34m in 2014. In 2009 17 share offers targeted £1.5m of share capital.

South East London Community Energy raised its target of £250,000 in less than two months. Portpatrick Harbour, Scotland’s first community-owned port, raised £103,395, 138% of its target, in two months.

Both offers received the Community Shares Standard Mark to show they followed good practice and were hosted on Microgenius. Exeter Community Energy raised £390,000 offline in less than three weeks.

Peter Couchman, chief executive of the Plunkett Foundation, said: “There are potential new options being considered for community shares, as the spending review saw the list of qualifying investments for the new Innovative Finance ISA being extended with effect Autumn 2016 to include debt securities offered via crowdfunding platforms. The government will continue to explore the case for extending the list to include equity crowdfunding.”

The number of community shops and pubs continued to increase. At the end of 2014 there were 325 community shops; by 11 December 2015 there were 337. The number of co-op pubs increased from 34 to 39.

In April, the government announced that pubs listed as assets of community value (ACVs) in England would no longer be subject to permitted development rights, which enable change of use and in some cases demolition. The Plunkett Foundation welcomed this but called for stronger ACV status, for example by giving communities more time to raise funds.

In November, the chancellor confirmed significant cuts at the Department for Communities and Local Government, the Department for Environment, Food and Rural Affairs and the Office for Civil Society. Peter Couchman said the impact of these changes had yet to become clear. The business rate review, expected before Christmas, had been delayed until March 2016.

“The chancellor has confirmed an extension to the small business rate relief up to April 2017, which means businesses below a rateable value of £6,000 will receive 100% relief,” he said. “Some businesses may be eligible, however, under the terms of the rural rate relief scheme, which has different rules. The retail rate relief will not continue beyond April 2016, and the current 2% inflation cap on annual increases will also be removed.”

Plunkett also partnered with the Power to Change Trust on its initial grants programme and helped urban communities establish community-owned shops with funding from the Esmee Fairbairn Foundation. It reports a wider mix of community groups and types of co-ops joining it than ever, and wider awareness of community ownership, particularly following the Prince’s Countryside Fund’s National Countryside Week and Co-operatives UK’s Co-operatives Fortnight.

Key events:

JAN: Baywind hands over to High Winds Community Energy, which will set up new turbines through a £3.6m share offer

JAN: Balcombe, the village on the frontline of fracking protests, installs community-owned solar panels

MAR: Media co-ops meet other alternative media outlets in Manchester

APR: Supporters Direct celebrates supporter ownership week

MAY: Plymouth Community Energy raises £850,000 via second share offer

JUN: Positive News becomes a bencom and launches £300,000 share offer

JUN: Plunkett Foundation’s £1.15m partnership will support 50 woodland social enterprises over three years

JUL: Government announces intention to end Feed-in Tariff pre-accreditation

AUG: Share offer aims to bring Portpatrick Harbour into community ownership

SEP: Community Energy Conference discusses sector’s challenges

OCT: Feed-in Tariff pre-accreditation removed

OCT: Balcombe’s co-operative solar park gets planning permission

OCT: Government changes mind on tax relief for community energy

NOV: Repower Balcombe will not fund solar farm co-operatively due to government policy changes

NOV: Clean Energy Dash begins

NOV: Tax relief no longer available for community energy investors

Highs and Lows:

Dave Hollings

Co-operative and Mutual Solutions

Highlights:

The highlight was the re-opening of The Dog Inn at Belthorn under community ownership in November. Having advised other communities to save their pubs, it was rewarding to save the pub in my own community.

Low points:

The lowlight was government removing support for community renewables schemes in successive months, knocking the stuffing out of the flourishing community renewables sector.

What would you like to see happen next year (and how do we get there)?

Lots of hard work, as usual, but also getting the message out to communities up and down the country that they can save their much-loved pub.

Peter Couchman

CEO, the Plunkett Foundation

Highlights:

The highlight of the year for me is the number of communities still coming forward to tackle the issues they face by forming a co-operative. Most will never have been involved in a co-operative before, and all will be an inspiration.

Low points:

The low point has been the continuing struggle to secure resources to support communities to form co-operatives. All involved in co-operative development face this daily struggle.

What would you like to see happen next year (and how do we get there)?

2016 is looking to be an exciting year with a number of programmes to support community co-operatives. I’d like to see the co-operative movement getting behind such work as happens in so many other countries.

Emma Bridge

Chief executive, Community Energy England

Highlights:

2015 has certainly been a year of highs and lows for the community energy sector. It has seen the largest growth of community energy projects and huge support and investment from the public.

Low points:

It has also seen an unprecedented number of changes in government policy which has rocked the sector and will challenge the real and varied benefits that community energy can bring to a local area.

What would you like to see happen next year and how do we get there?

My wish for the government to keep its original promise to extend social investment tax relief to include community energy and to remove some of the regulatory and policy barriers which prevent groups from supplying energy locally and delivering energy efficiency programmes for those in need. Community energy has a huge potential to transform the energy market, reduce carbon emissions, improve the local economy and help those in fuel poverty. These are all things which you would think the government would be promoting wholeheartedly.