The UK’s first employee-owned renewable energy installation

A new 50 kilowatt PV array at the Eden Project has just become the UK’s first employee owned renewables installation. Ebico, the Witney-based social enterprise that is the UK’s only not-for-profit electricity supplier, lent money to a new company that put 200 panels on the roofs of some of Eden’s storage buildings. Employees are now able to buy shares in the new business and the proceeds of this unique offer will be used to pay back Ebico. Savers putting in as little as £200 each will share in the feed-in tariff income for the next 25 years. Returns are projected to be over 10% per year for small investors. Feed-in tariffs, particularly for solar PV,  have been attacked because they subsidise richer householders at the expense of the rest of the population. The aim at Eden has been to show that renewables can also be of financial benefit to people not able to afford to put PV on their own roofs. I helped structure this deal and wrote the document that offers the shares to employees.

The recent changes in the solar PV tariffs mean that installation such as the one at Eden are less attractive to small investors. Other technologies, such as wind and anaerobic digestion, are now much more appropriate for employee or community financing. The returns to investors can be at least as high as we project for savers buying shares in the PV array at Eden.

The aims of feed-in tariffs are to encourage smaller renewable energy installations, push down the cost of new low-carbon technologies and, third, to assist in the decentralisation of electricity supply. The solar PV tariffs worked extraordinarily well at building up an efficient and competitive base of installers and reducing the price of household installations by about 50% in the space of two years. Anybody wanting an array on the roof of their house in 2009 would have got a quote of about £5,000 per kilowatt. Today, that price can be below £2,500 for a larger installation. There is no doubt that the PV tariffs successfully met the first two of the three aims that the government had for the tariffs.

What about the third objective- the decentralisation of electricity supply? The evidence here is mixed. Although hundreds of thousands of household PV installations have taken place, the impact on the electricity supply of the UK has been of the order of 0.1%. Wind turbines owned by community companies must surely be the next step. One 500 kilowatt wind turbine, the sort of size that might sit  on a small hill at the edge of a town, can typically provide the same power output as three or four hundred domestic PV installations or twenty five times as much as the Eden array.[1]

The striking thing about community ownership of wind turbines is that local resistance disappears if people have a financial stake in their success. One wonderful Dutch study even showed that people ceased to hear the swishing noise of the blades if they had some ownership of the wind farm. Community ownership is the only way we are ever going to see the UK use its under-exploited resources of onshore wind. Today, the costs of the subsidies for renewable energy are borne by everybody but the benefits are largely flowing to the large electricity companies and richer householders. Larger scale community energy installations, such as the one at Eden, can achieve rapid growth of low carbon energy sources and also remove the regressive element in the feed-in tariffs.

[1] The 50 kW Eden array will deliver about 47,000 kilowatt hours a year, or just under 1,000 kilowatt hours per kilowatt capacity. A well sited wind turbine will deliver a ‘capacity factor’ of over twice as much.