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BY KATIE - MYGREENPOD, 20 Nov'14
Power to the people
Community-benefit renewable energy is at an all-time high in the UK. The projects are increasingly attractive to local communities with an interest in clean energy and ethical investments — and could be on the verge of redefining our future energy mix.
Ed Davey has said ‘We’re at a turning point in developing true community energy in the UK’, and that for too long community energy has been a policy footnote, ‘with all the focus on big generators and individual households – all but ignoring the potential of communities to play a key role.’
Over 5,000 UK groups have worked to transform the way their communities use energy; can we really wrest power from the Big 6 and transfer it into the hands of the ‘Big 60 Million’? PQ talks to Toddington Harper, CEO of BELECTRIC UK and Big60Million, about why it’s time to give power to the people.
The big idea
Toddington comes from a family of renewable energy entrepreneurs; he grew up in the Middle East with a television powered by solar energy and wind turbines. With a smile, he recalls that it ‘went fuzzy in strong winds’. His father, Brian Harper, was one of the first pioneers in the solar energy industry, when solar panels were 99% more expensive than they are today.
‘He was building eco-homes in the desert of the United Arab Emirates in the late 1970s’, Toddington explains, ‘when one day somebody turned up with a solar panel and said, ‘we need electricity to communicate with you. This provides it.’ My father shimmied up the pole, took his first look at a solar panel, and solar power has been a massive part of our lives ever since.’
Having grown up only knowing renewable energy, Toddington was pretty sure that this was how the world was powered. The illusion was shattered when he found out about fossil fuels during a school geography lesson. As it turned out, he discovered, no one else’s TV was powered by a wind turbine.
Ever since, Toddington’s mission has been to turn his childhood beliefs about how the world worked into a reality. His work has included a thesis on fuel cell technologies at university and the creation of FuelCellMarkets.com to implement its conclusions.
The focus was expanded through LowCarbonEconomy.com, before Toddington completed the circle and returned to solar energy. He created his most recent initiative, Big60Million, to help produce homegrown solar energy, and to share the benefits of this solar energy with as many of the UK’s 60 million residents as possible.
Toddington says it’s an initiative ‘born out of frustration and the realisation that people will welcome more solar energy if it directly benefits them as well as the planet.’ His vision is for all 60 million residents of every town and village in the UK to have the opportunity to harness the wide-ranging financial, environmental and social benefits of a local solar farm.
The Big60Million was inspired by Toddington’s work as the CEO of BELECTRIC UK Ltd, a global technology market leader in the development, engineering, financing, construction, operation and maintenance of large-scale solar rooftop and solar farm projects, which currently generate enough energy in the UK for the equivalent needs of 40,000 UK homes every year.
The solar farms have a performance ratio much higher than the industry norm. ‘We typically work with thin-film technology, which has the lowest energy and carbon payback of any type of solar panel’, Toddington explains. ‘It allows us to produce energy more efficiently and reliably throughout the year. We manufacture a lot of the components ourselves; by using only the best materials and components, we’re able to create incredibly efficient solar power plants of the highest quality.’
For Toddington, Big60Million offers solar energy in an affordable and attractive financial model. It allows communities to share the benefits of the renewable energy generated at sites such as Willersey Solar Farm, which was the first Big60Million project.
Big60Million’s concept is to develop, build and maintain best-in-class solar projects that offer wide-ranging benefits to communties — not least the opportunity to buy Solar Bonds, which offer attractive interest rates, and own a stake in each solar farm. Willersey Solar Farm is a 3.8MWp project that now produces enough energy for over 1,100 typical houses — or for those with electric vehicles to drive over 18 million kilometers per year.
September 30 2014 was an important day in the Big60Million calendar: it was the day the first Big60Million bond offering closed for Willersey Solar Farm. As Toddington predicted, people voted with their wallets: they invested in the solar mini-bonds — which cost just £60 each — and embraced the opportunity to boost their income while supporting the growth of homegrown community renewable energy.
When the first £4 million bond offering for Willersey Solar Farm in Gloucestershire closed, it was close to a million pounds over-subscribed. ‘The Solar Bonds issued for Willersey Solar Farm were certified by the Climate Bond Initiative as the UK’s — indeed Europe’s — first Climate Bonds’, Toddington explains, ‘and the solar farm will produce energy to power over 1,100 homes over the course of a year — every year for the project’s lifetime.’ On top of that, the Big60Million investment model proved that solid investment performance can be compatible with socially responsible principles.
The idea that local communities are offered first refusal on investment in the solar projects is a marked departure from the traditional route, where profits would be snapped up by a small number of investors in the City of London. Those who invested in Willersey Solar Farm are set to receive 7% annual interest on their investment (before tax), which is paid twice a year: once before Christmas and once before the summer holidays. This is paid for five years; after that investors have the option to take their money out (in full) or reinvest in the project for a further period. It’s the first of many Big60Million mini-bond offerings that Toddington hopes to roll out. While the opportunity to take part will be open to all UK residents, companies and SIPP pension schemes, a key principle is that bonds will always be offered to those closest to each solar project first.
‘I’m not a financial adviser and I don’t claim to be’, says Toddington ‘but with the support of Rockfire Capital, which is authorised and regulated by the Financial Conduct Authority, we were able to put together an offering which, according to Financial Website of the Year Thisismoney.co.uk, ‘looks good when interest rates are at record lows and is much more than investors will get with a cash ISA’.
Toddington is so confident in being able to deliver the investment returns that he offered the assets of Willersey Solar Farm as security to bond-holders. This, he believes, ‘is the right way to do business’.
Shortfalls and blackouts
Toddington stresses that community energy projects aren’t ‘better’ than putting solar panels on individual properties, and that it’s not an ‘either/or’ situation. ‘I am delighted that there are more than 600,000 domestic solar energy systems already installed, and that our renewable energy capacity is growing’, he says. ‘However, the UK faces huge electricity shortfalls. We are facing blackouts, and that’s a huge concern.’ Toddington cites the depletion of North Sea oil and gas reserves, underinvestment in our energy infrastructure, nuclear power stations being decommissioned faster than they’re going to be constructed and the fact that we’ve been a net importer of energy since 2003 as key issues for the UK energy market. ‘To help reverse or mitigate that problem we need as much renewable energy as possible. If you’re fortunate enough to have a roof that faces the right direction and you own your house, then of course we’d recommend you put solar panels on in.’
But not everyone’s in that position — and not everyone with a suitable roof has several thousand pounds of disposable income to invest in that kind of installation. At £60, the price of a Solar Bond is similar to that of premium bonds, making it a very accessible option. This is critical to Toddington’s quest to find a mass-market solution with which to approach as many of the UK’s 60 million people as possible.
While Toddington acknowledges that we all need access to clean renewable energy, planning permission for projects will only be granted if people in the area decide the project is suitable for the community. ‘Suitability comes in many forms’, says Toddington. ‘It’s crucial for us to make sure the site is sensitively located, and not on high-grade agricultural land’.
Big60Million projects aren’t all about the money; in future they will come in all shapes and sizes, from roofs and car parks to solar farms. In the case of the latter, less than 5% of the land underneath a solar farm has anything attached to it, meaning that over 95% of its footprint can be used for grazing, agriculture or other or biodiversity measures. ‘According to the recent World Wildlife Fund study, over 50% of the world’s animals have been wiped out in only the last 40 years, largely due to destruction of habitat and intensive farming’, says Toddington. ‘If we can use solar farms to provide a sanctuary to protect wildlife then that’s fantastic.’
With that in mind, BELECTRIC has planted over 20 acres of wild flowers in Willersey. ‘Because we are only experts on solar energy, we’re working closely with environmental partners such as the RSPB, British Beekeepers Association and FlowerScapes to deliver the biodiversity measures. We now have beehives permanently stationed on as many sites as possible, which in the summer months house over a million bees’, Toddington says. ‘We’ve put in birdboxes, batboxes, hedgehog boxes, hibernacula — you name it. And at the end of the flowering season, we bring the sheep in to enjoy a nutrient-rich wild flower forage and trim everything down in the process. It’s a fantastic opportunity for us, the food chain and for nature.’ Local groups and kids from nearby schools have used the site for educational programmes; they’ve painted the various on-site animal sanctuaries and have even helped to plant a seed bank for future generations. ‘We’re really delighted about that’, Toddington beams, ‘and of course we’re also excited that the bond has sold out — in fact, it was oversubscribed, which demonstrates that there’s clearly an appetite for clean, ethically sound investments that provide benefits to as many people as possible.’
Tilting playing fields
When asked about the biggest challenge Big60Million faces at the moment, Toddington doesn’t hesitate in his response: ‘It’s the government’s involvement with the solar energy market’. He explains the industry is just as interested in getting off subsidies as the government is, and argues that the subsidies were only ever designed as a temporary driver until they were no longer needed. Having delivered incredible cost reductions of 80% in the last three years, the industry now only needs a further few years of stability to get off subsidies permanently. ‘It’s the rapid changes in government legislation and the uncertainty that creates that causes the problem’, Toddington explains. ‘With solar, it feels like we’re not on a level playing field — and in fact that it’s constantly being tilted against us.’
On the one hand, solar power is extremely popular with the general public. ‘According to DECC, 82% of us support solar power’, says Toddington, ‘making it by far the most popular form of renewable energy. Yet the government keeps changing things and the messages are so mixed. Regulations are constantly tilting in favour of other technologies and away from solar energy. This is a real challenge. The best thing the government could do would be to leave the legislation in place and ‘let us be’ for a bit, to let us continue the path we’re on, without changing everything so rapidly in support of technologies, like fracking, that are just such a bad idea’.
There are approximately 60 million people in the UK; if 60 million people could benefit from solar energy, then Toddington believes they’d support it. ‘It’s pretty clear from our first Big60Million project that we have a fantastic formula that benefits a lot of people’, he says, ‘but we need it to benefit as many of the 60 million people here as we can.’
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