Sharenergy is keen to support new projects, or projects which need a step change. You can see more details of the services we offer here. Here’s a brief overview of the steps taken by a typical community energy project.
1. The Idea
Somebody has a good idea for a renewable energy project. It might be an abstract idea: I want to combat climate change! It could be based on a site: this is a windy hill, perhaps can we put a turbine here… or a problem: how do we get rid of this food waste? The first thing to do is to find out if it really is a good idea. Having a look at what has already been done can be a good guide – see our projects page for inspiration – or contact us for a quick expert opinion. We’ll talk to you on the phone or come and see you and help to work out if the idea has energy potential.
2. The Group
We can’t do much on our own. Perhaps you are already part of a community group. That’s often the best place to start, as you probably have a lot of relevant talents between you. You might be able to take the idea to a group that you are not yet part of. Or Sharenergy can help you meet other people who might like to work with you. A group need not be big. Two enthusiastic people is a group – and many succesful projects have started with less.
Now we have an idea and a group. The next step is to do more detailed study to work out if the project is feasible. This could be broken down into three steps:
– Does it work technically? Answering this question might well require some specialist support, although a dose of common sense is just as important.
– Does it work as a business? The ‘bottom line’ may be different, but a social enterprise is still an enterprise. This means it has to make sense financially -a lot of good ideas don’t,so lets start with the good ideas that do. Just as importantly, will the rest of the business case add up. If there’s a perfect weir on the river but the owner just wants peace and quiet then a huge public hydro project is unlikely to appeal to them.
– Does it work as a community project? Many people wanting to set up community energy projects want to set up something innovative – but is that new technology suitable for a community share offer where members of the public risk their cash?
Answering these questions will involve a lot of work for the group and tends to involve some expenditure. There are now several sources of funds to support this work. Sharenergy can help advise groups with applications. Typically, groups at this stage spend most of their funds on technical feasibility work – plus some on support for putting together the business case and preparing for legal agreements, share offers etc. Sharenergy often bids to provide this sort of support.
4. Forming a Society
Typically you’ll need a legal structure in order to apply for funding. Almost all of the community energy projects we work with are constituted as Societies – currently the only suitable form for most projects wishing to carry out a community share offer in the future. Sharenergy supports groups to set up Societies.
5. Decision time
Armed with the output of the feasibility process, it’s time to decide whether to push the project forward. It’s worth taking the time to consciously make this decision. We’ve seen projects drift along on the back of non-committal technical studies or uncosted plans – but we think this is a serious waste of everybody’s time. Scale is another issue – sometimes a lack of confidence means that projects think too small and end up marginal. Sometimes a decision to not go further is the best one – more commonly, projects may need to re-examine preconceptions and change direction in order to succeed
This is where it gets serious. Project development will involve planning and permitting, agreement of legal documents, appointing installers, getting a binding grid connection, and planning for a share offer or other fundraising. This is a real commitment and can be the most challenging phase of the project. For wind projects this can often take several years, although solar projects can be much faster.
Sharenergy will support your group to develop the project. You will be able to do a lot with your own resources, but experts in technology, planning, ecological impact and many other disciplines may be needed to take the project all the way to the planning stage. In some cases Sharenergy works in very close partnership with groups to develop projects, often taking part of the project risk – generally for projects we have worked with for some time. In other cases groups pay us a small fee for a well-defined service, from grant or loan funding , or from an early ‘pioneer’ share offer.
7. Share offer
Community share offers are the main way in which community energy Societies raise the capital they need, gain new members, and a key way in which they connect to their community. The best way to learn about these is to join another co-op – or at least read some share offer documents!
8. Build it
Now the money has been raised we can actually install the hydroelectric generator, raise the wind turbine or wire up the solar array. There may also be development costs to pay back, depending on their source. A board elected from the co-op members runs the project just like a normal company (except that they only get paid expenses – no directors cut).
Some income goes to keep the project going, to pay operating and admin costs. Some of the surplus goes to be shared out amongst the co-operative members as interest in recognition of the fact they put in the cash in the first place. Depending on the size and type of project, there may be enough left for a community benefit fund to support local good causes – green schemes, schools, fuel poverty action. Some projects create their community benefit by providing cheap energy to community buildings. It’s not easy to make a surplus though, and many projects concentrate on low carbon generation as their most important output.