St John’s Sunshine solar in the shade

St John's Sunshine, a community solar photovoltaic PV project (and much more) in Old Trafford Greater Manchester, is in limbo following the Government's instant Feed in Tariff (FiT) review.

A really good idea with really good intentions

I first met the Rev John Hughes, a charismatic man with a real desire to do something lasting for the community around him, at a family event at the St John's Centre early in 2011. It was difficult to keep the discussion moving as we kept getting interrupted by people keen to talk to him, and he was also making sure everyone knew about the free ice-cream coming from the van parked alongside. John wanted to put solar panels on the roof of the church, not just to save energy but to also benefit the community in some wider way. We started to chat about the co-operative approach to doing things, and how great it would be if local people could invest in the panels, reaping a modest reward for their contribution, and more importantly getting involved in running a new enterprise that would do much more for Old Trafford. Others local to the Centre came willingly and voluntarily on board and together we developed a vision for St John's Sunshine, an Industrial Provident Society (IPS), with objectives deliberately biased in favour of helping people in Old Trafford.

For the next few months a lot of hard work ensued. Another Founder Member, Gavin, was successful in winning a grant to help the process along, IPS rules were hammered out, FSA forms filled in, the Church engaged, local installer Jacob's Eco Energy appointed, specialist support from the Co-operative Enterprise Hub sought, Co-operative and Community Finance helped out, architects got busy, planners got talking, membership and community involvement was debated and debated some more, funding plans A, B and C...and Z got analysed, a business plan was hatched, share offers explored, logos prepared, briefs drafted and more. All this has happened, with hiccups and hair pulling, meetings, emails, phone calls and a passion to see it happen. Slashing the FiT has in one giant swoop has all but put pay to St John's Sunshine's goals. Bewilderment and disbelief have ensued and a sense of minor panic. Can we, should we, pull it out the bag in 5 weeks and beat the 12th December deadline?

The original plan and why the changes so devastating

Our modest plan is to cover around half of the Church's south roof in solar PV (Phase 1=10kW, we have ambitions for bigger and better). We don't have £30,000+ just lying around to fund the capital cost and wanted to avoid borrowing from the Bank, which is certainly viable and available. The interest rates charged by Banks would take most of the projected FiT income so giving us solar but with most of the benefit heading out of the community. Another way, which isn't new, is to ask the community to pay the cost by purchasing shares in the panels. Each investor member would get their money back plus a modest return, leaving around £1,500+ per year after all the ongoing costs are taken into consideration. The 'costs' we're talking about are insurance, maintenance, FSA registration etc, things that are essential. All the time input from Directors and members, for admin and management, is voluntary. The aim is to use this 'surplus' to support local Sunshine Grants, which offered a great incentive for people to buy shares. It's important to note that all 'members' of the IPS, who can pay as little as £1, have the same rights as an investor who contributes £20,000. A lovely, local, mini democracy. We have grand plans to link to other projects, including the Carbon Co-op and have our other Founder Member Pete to help us there. This and other initiatives will support wider energy saving and reduction in fuel poverty in the area.

The reduction in the FiT by around 60% means that we have the following options – find a Bank willing to lend at interest rates of no more than 4-5% and eliminate half our objectives making the IPS unnecessary and untenable; try to attract £35,000 in shares from the community but don't offer grants and find it difficult to pay ongoing costs; source £35,000 via an interest free loan and cover costs and have a little surplus over the years to support a local cause.

So now, the four of us clutch at thinning straws at the very possibility of getting things done by the 12th December (impossible), a change of heart by the Government (all but impossible), a promise of a consultation that might see community groups get some seeds of comfort (all but impossible) or perhaps a miracle. 

Comments

Including price rises in electricity in your BP

Hiya,

Have you factored into your business plan projected price rises in electricity over the next 20 years?  At work we have dug out figures from DECC which show a 7% plus annual increase (including inflation) to electricity purchased.  If you factor this into your financial model as savings to the church, and get a new quote from your installer in, say, six months, maybe the project will still work?

Also you could look at increases in the export value of the electricity.  At the moment it is 3p - you could talk to Good Energy as to how much this may be worth in the future, I have seen figures of 6p suggested.

 

best wishes

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