Light at the end of the Spending Review? by Reg Platt

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As the budget cuts kick in and the spectre of the October Spending Review looms it’s difficult to see the future as anything much other than bleak, not least for community and voluntary groups. However, there is a ray of light for these groups and it’s a light powered by solar panels and wind turbines.

Support for communities generating renewable energy continues to grow apace from the grassroots up into Whitehall. Communities have responded in abundance to initiatives like NESTA’s Big Green Challenge, which supported them to innovate responses to climate change.

Meanwhile, in their manifestos, both parties in the coalition government were strong supporters of decentralised energy – seeing it as the perfect complement to their broader aspirations for localism, bringing a new take on the notion of ‘decentralised power’.

But while support is one thing, action is another, and historically it has been held back by the high costs of renewable technologies. However, there is now the potential for all of this to change.

In April this year the government introduced a radical policy instrument called the Feed-In Tariff, which means households and organisations get paid for generating renewable electricity. The money earned through the tariff is index linked and guaranteed for 25 years. On top of this, the electricity generated can be used and/or sold back to the grid making a big difference to the cost of energy bills.

This money could be a rich revenue stream for community groups. In new research by the Institute for Public Policy Research and British Gas, published alongside the report Green Streets: Exploring the Potential of Community Energy, we have estimated that solar panels on village halls and community centres could generate around £18 million a year, and pubs around £15 million a year.

The report draws on the experiences of fourteen communities undertaking energy projects with funding and technical support from British Gas. One of these communities, a voluntary organisation that runs a Lido in Beccles, Suffolk has installed solar panels that will generate it an annual windfall of £3000 a year, which will be vital to keeping their finances in shape.

These technologies also have a key role to play in our response to climate change. On their own individual installations don’t generate major emissions reductions, but their high visibility on community buildings means they could have a major impact on the way people think about and use energy by making the technologies seem more normal.

However, while the opportunities are clearly huge it’s not straightforward for community groups to get hold of these renewable technologies. They still need to raise the up front costs and they will tend to need a lot of individualised support. This is where local authorities, support providers, social enterprises, and technology suppliers need to step in and help out.

Meanwhile there have been rumblings from the coalition abut putting the future of the Feed-In Tariff, and a similar subsidy for renewable heat, into question and so all eyes are on that October Spending Review. The government must remain committed to keeping these policies in place. Without them the future will look a lot of bleaker for community groups.

Reg Platt is a researcher at the Institute for Public Policy Research. The report is available at http://www.ippr.org.uk/publicationsandreports/publication.asp?id=773


One comment on Light at the end of the Spending Review? by Reg Platt

  1. Looks like domestic users of microgeneration got most of what they were asking for. AS MD of a solar company, I’ve been looking at the Treasury documents today and here’s my take on the DECC /energy aspects of the 20 October spending review:

    http://www.solartwin.com/news-wed-20-oct-2010-what-does-the-comprehensive-spending-review-mean-for-green-energy-enthusiasts

    Regards, Barry.

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