At the recent Labour party conference, our director Ali Abbas had the opportunity to address the delegates about the support we want to see from the government. You can find a copy of his speech below.

My name is Ali, and in 2015 I helped to found Greater Manchester Community Renewables as a practical way of delivering carbon reductions in our local area.  Since then we’ve raised £ ¾ million in community shares from over 300 members, which we’ve used to install solar arrays on 9 schools and a community centre.  

A couple of quick stats: so far, we’ve generated 2,000 MWh of clean electricity, which is enough to make over 100 million cups of tea, and has prevented over 700 tonnes of carbon emissions.  We’ve also saved our partners a total of £180,000 on their energy bills, and created a £60,000 community fund to support environmental education and carbon saving initiatives.

As Michaela said, community energy is a magical thing: it covers a wide range of activities that are essential to decarbonising our society and tackling fuel poverty – not just generating energy but anything from retrofit and energy efficiency advice to EV charging points and local heat networks.

It delivers multiple benefits – it’s not just about increasing renewable generation and reducing carbon emissions, it’s also about engaging and empowering communities – from raising awareness about the climate emergency to demonstrating practical solutions that benefit the local community and act as a beacon of hope to inspire more people to take climate action.

We all know that we’re not on track to meet our national carbon budgets – never mind a fair and equitable carbon budget that doesn’t rely on false solutions like burning trees in power stations, heroic assumptions about unproven technologies like carbon capture and storage, and the fantasy economics and toxic legacy of nuclear power which has never even come close to being built on time and on budget.

But I digress – we all know we need to do more faster, and community energy has the potential to deliver at pace in every neighbourhood.  It also provides a unique way of leveraging the skills and expertise within local communities and the assets of those who want to use some of their savings to make a positive difference.  I was reading just yesterday that UK households have a total of over £1.5 trillion of cash savings – mobilising even a small fraction of that could be transformational.

So it’s great to see the focus that the Government is giving to community energy as part of the Local Power Plan.

One of the key opportunities is in building partnerships between local authorities and the community energy sector – so we have fewer councils working in silos, unwilling to engage and putting barriers in the way of progress (I’m not going to name names), and more councils working in partnership with groups like ours to make best use of our complementary strengths to drive more rapid deployment.  

Some of the ways the Local Power Plan could do this include encouraging local authorities:

• To enter in cooperation agreements with community energy groups, like the one we had with Salford Council when we were first starting out
• Secondly, to work with us to develop a joined-up project pipeline, and explore the joint delivery of energy services such as energy advice or retrofit assessments
• Thirdly, to procure electricity from community energy assets through long-term Power Purchase Agreements
• And fourthly, to offer community energy projects access to local authority land or buildings for new projects or shared ownership of existing renewable energy assets.

One of the challenges we’ve faced is how to ensure that more deprived areas can get the full benefits of community energy.  We’ve been able to fund solar arrays on schools in deprived communities with investment from wealthier areas, and we’ve offered energy efficiency advice in those communities – but there’s no direct financial benefit to local residents because we aren’t able to sell surplus electricity from our solar arrays to consumers.  

So we’re in the crazy situation where we have to sell any surplus to a large energy company for say 8p a unit who then sell it on to their customers for 24p a unit – when we could be selling it direct to local people at say 12p a unit – halving the cost they pay for their electricity and helping to make more projects more viable by increasing our export income by 50%.

As well as giving community energy groups the right and the means to sell the electricity we generate to local residents, there are several other ways the Government could help realise the potential of the community energy sector.

Grid connection can be a huge challenge: we’re lucky in Greater Manchester that this hasn’t been an issue for us yet, but we know it’s a blocker for energy generation projects in several parts of the country – and I understand the Government has committed to tackling this, which is great news.

In terms of planning permission, rooftop solar usually qualifies as permitted development, but for arrays over 50kW, we still need to apply to the local planning authority for prior approval.  For example, our latest array was just under 1,000 panels on a series of roofs at a secondary school – most were flat roofs and none were visible from neighbouring properties, but we still had to spend money getting site layout plans and elevations drawn up and getting the application submitted, and it added an extra couple of months to the project timeline.  Increasing the threshold for prior approval from 50kW to 250 or 500kW would have no cost to the Exchequer, reduce the burden on planning authorities, and help reduce the upfront costs for new rooftop solar projects.

Another challenge is developing an investable business model. We currently have this anomaly where large energy generators get a guaranteed long-term strike price for their electricity under the Contracts for Difference scheme – for example, EDF got a strike price of £90/MWh for Hinkley C, which is now worth £125/MWh due to inflation (that’s 2.5 times more than the latest offshore wind auction) – whereas community energy projects only have the Smart Export Guarantee to rely on, which gives no guarantee whatsoever of the price we’ll be paid – and that makes it incredibly difficult to predict future revenues.  We’d urge the Government to implement the proposal in the Local Electricity Bill for Ofgem to set a fair price for electricity exports from community energy schemes to give us the same certainty that the big generators get.

On fundraising, we’ve been fortunate so far in being able to raise the funds we need fairly easily – with many of our members investing because of the community and environmental benefits of the project and even choosing to waive their share interest so we can add it to our community fund.  However, if we’re going to scale up, we need to attract more investors who are looking for a return as well.  

One of my bugbears is that investments in community energy schemes used to qualify for investment tax relief, but when the Feed-in Tariff was introduced, the tax relief was withdrawn on the grounds that schemes were getting subsidised twice.  However, when the Feed-in Tariff was scrapped, the tax relief wasn’t reintroduced so we’re now in the bizarre situation where you can get tax relief on investing into many other community businesses like a local pub or leisure centre but not when you invest in a local clean energy project.  Reintroducing tax reliefs for community energy projects will help us leverage more of that £1.5 trillion of household savings to scale up our sector.

And I just wanted to quickly mention the solar supply chain.  In 2021, Sheffield Hallam University exposed the prevalence of Uyghur forced labour in the manufacture of the silicon used in solar panels.  Since then, we’ve tried to source panels from outside China to minimise that risk but it’s been really difficult to find reliable information about this.  Given the ambition to rapidly scale up solar deployment, it would be really helpful if the Government could introduce a certification scheme like the one in France which requires manufacturers to report the embodied carbon in their panels which in turn means they need to be transparent about their supply chains.

Finally, a couple of other helpful interventions include enabling shared ownership by establishing a community right to buy into renewable energy assets, encouraging long-term power purchase agreements between public sector and community energy projects, and increasing the availability of affordable long-term finance to support the refinancing of the short-term capital loans offered in the Local Power Plan.

The Local Power Plan has the potential to be transformative, giving local people and institutions a stake in the energy system, enabling people to become part of the solution rather than being made to feel that they are always just part of the problem, and bringing people with us on this essential transition to a cleaner, healthier, zero-carbon future.  

We look forward to working with local and national Government to play our part in making this happen.