In this blog we will go over some of the big questions surrounding Community Energy by looking at the GMCR model. Perfect for anyone starting out or interested in learning more about it.
What is “community energy”?
Simply, a group of people (community) coming together to manage and run a clean energy-related project. This can be renewable installation (such as what we do), or energy efficiency and retrofit (see People Powered Retrofit).
Community renewables are often solar arrays but can also include wind turbines and other renewable sources. At GMCR we have focused on rooftop solar, as this is best suited for urban environments.
Why do this?
Lots of reasons! Not only is community energy almost always renewable but it sees power put back in local hands. When a community energy system makes a profit, it goes straight back to the community and not into the hands of shareholders.
GMCR was started after the founders wanted to make a tangible difference on climate change in their area. We’ve certainly been successful at making a difference, and you can do it too!
So, how does it work in practice?
The GMCR model looks, put simply, like this:
- Members of the community buy shares in GMCR
- GMCR takes that money to fund the installation of a solar array on a local school or community centre.
- The school/community centre uses what they can of the solar electricity generated, which they purchase from us (at a discounted rate to their primary supplier’s rate). We therefore become another energy supplier.
- The income we get, together with payments from any surplus electricity (which we can sell back to the grid), enables us to cover our running costs, pay share interest and return capital to our members over a number of years.
- Any surpluses are reinvested into developing new projects or contributed to our Community Fund.
What’s the ”Community Fund”?
The Community Fund is a ringfenced portion of money that is used to support environmental projects, usually in schools. Having a Community Fund is not essential for a Community Energy project however it is a great way to ensure that profits from the sites are reinvested into the community and spent, importantly, in a sustainable way.
How much money is needed to install a renewable site?
This is a complex question as it depends on numerous factors. Not just the size of the project that you want to establish but also the background work that is needed before installation can take place. To provide a rough idea, the 946 panels at our most recent site at Wellington School, Altrincham required investment of around £400,000.
What do GMCR do once the solar panels are installed?
Attracting investment from the community is just one phase of the project. Once the panels are installed we then move to a phase of asset management. We’re responsible for the upkeep of the panels to ensure that they continue to generate energy. If the panels are not generating energy then we have nothing to sell!
Is it a risky investment?
All investments carry an element of risk and we cannot definitively promise a return on investment. Instead, we make predictions based on the expected price of electricity and how much power the site will likely use over the lifetime of the renewable asset. These assumptions and predictions are explained in the Share Offer so prospective members can assess the level of risk themselves.
How can I get involved in Community Energy?
There are lots of ways to get involved. The most straightforward is to invest. Your investment can help purchase and install renewable assets.
Maybe you have a little more spare time than spare cash? Many Community Energy projects (such as GMCR) are volunteer run and so your time helping out could be really useful. If you want to volunteer with us, get in touch!
If you want to go even further then you might want to consider setting up your own community energy project. This can seem like a daunting task (and it is not without challenges), however don’t let this put you off. At GMCR we started with four sites back in 2016 but have grown over the years.
Where can I get started?
We’ve put together another blog with some tips for starting out with rooftop solar. You can read it on our website
In the meantime, why not subscribe to our newsletter to stay in the loop on all things GMCR? Sign up here.
Good luck!
Photograph: Ben Nuttall (NPS Solar), Ali Abbas (GMCR Director), Gemma Tunstall (CFO, Wellington School), Kate Eldridge (GMCR Director), Phil Smith (NPS Solar) standing on the roof at Wellington School, Timperly.
