A blog by Alice Wharton and Isla McCulloch from Co-operatives UK
At Co-operatives UK we’re adding our voice to Community Energy Fortnight to celebrate the community energy co-operators who make this sector so inspirational.
As a key part of the co-operative community and movement, we recognise the people who champion the community energy sector, their determination and commitment to a better world.
We often see new investors, members, directors and volunteers with community energy schemes use their experience to inspire concern for the community and bring co-operative values into other aspects of their lives.
How can we #HarnessOurPower to inspire others to think about the strength of the co-operative principles?
Democratic, open and voluntary membership, combined with the economic participation of members.
The scale and impact of community energy has brought the concept of democratic engagement with vital services to the mainstream. Shaking up the ‘big six’, possibly the most monopolistic industry in the country, is being made possible by community energy projects engaging with over 46,000 co-owner members, in England alone.
Member engagement goes beyond just observing the business; members of community businesses can often offer much more by volunteering time and energy, participating in AGMs and supporting the governance of the society.
Most will have invested their own money in a scheme through community shares and be receiving interest payments on that investment. Although social and environmental motivations are high for investors, don’t forget that developing a viable business model is at the core of every community energy project.
Members have a say in the distribution of surpluses, which is not inconsiderable, as evidenced through almost £720,000 in additional community benefit funds distributed in 2019! We’ve seen the ripple effect of these community benefit funds spawning new projects, investing in education, relieving fuel poverty, food poverty and more.
What if every investor in a community energy project took these co-operative principles back to their place of work? What a change that would make to building a fairer, more just economy!
We commit to #HarnessOurPower to elevate the work of community energy.
We’re encouraging more and more existing co-ops, community businesses and anchor organisations to consider investing in renewables for their own sites or with neighbouring businesses such as leisure centres and factories. We’re seeing new energy projects’ business models aiming to be as profitable as possible by having Power Purchase Agreements with nearby high energy use businesses and/or using generated energy on-site.
As a sponsoring body and through our Advice team, we want to ensure we can provide the appropriate legal and governance support for existing co-ops and community-led bodies to grasp these opportunities.
Co-operatives and Community Benefit Societies continue to be the most popular model for community energy projects (64% of all organisations). Since 2017, we have seen 81% of new organisations registered through Co-operatives UK choosing to be a co-operative or Community Benefit Society, which means that they are able to issue community shares.
As part of our Community Shares Unit, we have invested £181k in three energy societies through the innovative Community Shares Booster Programme (funded by Power to Change and Architectural Heritage Fund). Our ambition is to grow the programme to support new institutional investors to invest in community shares and playing our part in actively encouraging local authorities, public sector bodies and charitable funders to think more creatively about how they deploy their funds into communities.
We are committed to maintaining best practice in the community shares market, and our Community Shares Standard Mark has a clear focus on ensuring openness and transparency of share offers, instilling confidence in potential investors. As it is a voluntary regulation scheme, we can’t enforce the Standard Mark on every share offer but there is huge value to it being awarded to a share offer. We’re also aware of the collective nature of best practice in this growing market. One community share offer’s performance can have a reputational impact on ALL community share offers.
The Community Shares Standard Mark also acts as a confidence boosting checklist for societies to ensure they have everything in place before launching, such as planning, roof leases for solar PV projects, community engagement plans and tax relief agreements from HMRC.
While acknowledging the powerful role of volunteer power, it is essential we continue to communicate the reality of dedicated staff time required to run the business, manage the share investments and communicate with investors and the wider community. We want to support community energy projects to be accessible to all communities, some of whom may not have the volunteer capacity traditionally seen in community energy projects. If we are to #BuildBackBetter, we need to take everyone with us. Listen to the Climate Change episode of our More Than A Shop podcast (released 17 June) where community energy adviser Louise Marix-Evans talks about diversity and inclusivity in community energy projects.
Working closely with partners across the sector, we commit to being part of the collective voice to lobby government, continue to improve society legislation and promote the benefits of cooperatively run, community-owned energy for everyone.
The way community energy projects live and breathe co-operative values and ways of working across the country are in demand, now more than ever. Those who have already overcome the myriad of challenges in setting up a co-operatively run, community owned energy scheme are beacons to follow into the future. Together we can #HarnessOurPower.
Isla McCulloch and Alice Wharton manage the Community Shares Unit at Co-operatives UK. We work with our partners to promote best practice through the Community Shares Standard Mark; train and license Community Shares Practitioners; and grow the market through the Community Shares Booster Programme.
Join us to celebrate Co-op Fortnight from the 22nd June - 5th July! We’re celebrating the role that co-ops played during the recent crisis and encouraging everyone to #KeepCooperating.