An introduction to Bristol Energy Cooperative and our solar panel project for community and commercial buildings

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1 The Background 77 Stokes Croft, Bristol, BS1 3RD; tel: ; An introduction to Bristol Energy Cooperative and our solar panel project for community and commercial buildings Bristol Energy Cooperative (BEC) was formed in 2011 by a number of community groups across the city. Our mission statement is Investing in renewables, cutting carbon, and building community. Our business model is to develop renewable energy installations at scale. Profits from these will then be used to a) develop further renewable projects and b) cross-subsidise energy efficiency projects. We work with communities and businesses across the greater Bristol area. There s more information about us at We started small, but are now beginning to reach a reasonable level of scale. In 2012 we held a community share offer to install solar panels on community buildings. We raised 125,000 and panels were installed on Easton Community Centre, Knowle West Media Centre, and Hamilton House more details at In 2014 we raised a further 120,000 in a second share offer to install solar panels on additional community buildings - the Bristol Folk House, Mill Youth Centre and South Bristol Sports Centre. And we are now in the final stages of preparing our third share offer for a further portfolio of solar on community buildings. Our Model Our business model for these installations is: 1. BEC provides the funding for the installations, typically through a public share offer. 2. BEC leases the roof space from the organisation, and organises the installation of the solar panels. 3. BEC receives incentive payments from the government for the electricity generated from the panels, while the building user benefits from a long-term supply of subsidised green energy. Each unit of electricity the organisation uses from the panels is one less unit it needs to purchase from its existing electricity supplier. 4. BEC uses the government incentive (Feed-in Tariff) payments to: a) Buy back all the shares issued over the lifetime of the project. b) Cover on-going project costs. c) Pay investors interest on the shares they bought. Page 1/8

2 The Deal When we first started, the Feed-in Tariff rates were high enough for us to be able to cover the share buy-backs, interest payments and all our other costs, and provide free electricity to the building users. However, since then the rates have dropped by more than 50%, so we cannot provide the electricity completely free any more the figures just don t add up. So instead, we ask the organisations to contribute towards the costs by paying something for each unit of electricity they use. This is likely to be 7-8p per unit, and rises each year in line with the Retail Price Index. The actual rate depends on the efficiency of the panels at each location, which in turn depends on factors such as roof incline, orientation and the amount of shading. We can only be more precise once we have detailed quotes from the PV installers and have put them into our financial model. However, we guarantee that the perunit rate the building user pays for the electricity used from the panels will be cheaper than the per-unit rate they pay to their current electricity supplier. The electricity from the panels will not cover all the building user s usage, particularly at night, for example. In those situations they continue to use the electricity from their normal supplier. We install additional meters so they can see how much of the electricity from the panels they have used. We also insure the panels for damage, breakdown, business interruption and public liability. In short, building users benefit from (inflation-linked) fixed price, subsidised green energy for a long-term period, during which time external energy prices are likely to continue to rise. The building s carbon footprint is reduced, and it is a good PR opportunity too. We need to have a long-term agreement with building users because the panels only pay for themselves after a number of years. However, we have built a good degree of flexibility into the agreement, for example: The building user can purchase the solar installation at any time during the lease at a reasonable market price based on the age of the system and its generation performance. If the building user needs to do some repair work on the roof, the panels can temporarily be removed. If a potential roof partner has some funds to contribute towards the project costs, we can put this into our model and reduce the electricity unit charge accordingly. In addition, we gift the solar installation to the building user after 20 years and they then have free use of any electricity generated. It s anticipated that the panels will still be working at 85% or more of their original efficiency at this point. Page 2/8

3 Next steps If this scheme is of interest to you: 1. The first step is for you to complete and return the short self-assessment roof survey at the end of this letter. This survey information gives us a quick feel for whether your roof is technically suitable for solar panels. Don t worry if you can t answer all the questions, we can come and help you with this if necessary. 2. If the survey looks positive, the next step is for us to organise a solar installer to assess your roof for suitability. This may be done via a physical visit or online research. At this stage there is no commitment to move ahead with the project from either side. 3. If the installer s report is positive, and the scheme appears technically and financially viable, the next step is for you to sign a Letter of Intent with us. This gives us your permission to arrange a structural survey of the roof and obtain an energy performance certificate for the building (if you don t already have one). We have to pay for these items, so if the reports were satisfactory but you later pulled out of the scheme, we would expect you to cover these costs. 4. If the reports are all satisfactory and you wish to go ahead, a Heads of Terms document will be signed by both sides enabling us to raise the funds for the installation. Prior to installation a Lease and a Power Purchase Agreement will also be completed. This may all seem a little daunting but it is normally quite a straightforward process. Included below are some photos of our current installations and some FAQs. We hope this information has been useful. Do get in touch if you have any queries. Kind regards Bristol Energy Cooperative info@bristolenergy.coop Page 3/8

4 Our 25 KWp installation at Knowle West Media Centre Part of our 18 KWp installation at Easton Community Centre Part of our 50KWp installation at South Bristol Sports Centre Our 10 KWp installation at Bristol Folk House Page 4/8

5 FAQs What's the Feed-In Tariff? It's a government subsidy for renewable energy that was introduced in the UK in April It includes Photovoltaic (PV) schemes up to 5MW, and there are two payments: 1) Generation tariff a payment made for each unit of electricity generated, regardless of who uses it. The amount depends on the renewable technology and the size and date of the installation. For PV schemes the payments are currently guaranteed for 20 years. 2) Export tariff a further payment for each unit generated that is exported to the grid, ie, not used on site. A third benefit is that because you can use the electricity generated by the panels, you have to buy less from the grid, and this reduces your electricity bill. How long is the roof agreement with the Co-op? It's currently for 20 years, because this is how long the Feed-in tariffs last. Why should I lease my roof to you rather than buying my own solar PV system? If you choose to lease your roof to us, you will get a free PV installation without having to raise the capital for this yourself, and without the hassle of obtaining quotes and organising the roof survey and installation. You will save money on the electricity generated by the system and be supporting a social enterprise contributing to sustainable energy in Bristol. There is also the option for your organisation to invest in the Co-op and receive a share of the FIT income. However, if you are ready to install your own solar PV system on your roof, and have the capital to invest in it, you will make a higher financial return by doing this and making use of the feed-in tariff yourselves. Who maintains the PV system? The Co-op does under a maintenance contract which includes an annual system check. We also insure the system for damage, breakdown, business interruption and public liability. What happens if the system breaks down? The Co-op repairs it at its cost. The lease is for 20 years what happens after that? After 20 years, ownership of the panels is gifted to the building owner, after which they have free use of any electricity generated. There will be some reduction in efficiency of the panels as they get older, but they are expected to still be producing at least 85% of their original output after 20 years. Page 5/8

6 Can I buy the system from the Co-op? Yes, you can buy the solar installation at any time during the lease at a reasonable market price based on the age of the system and its generation performance. What happens if I sell the property? The new owner would take over the lease and enjoy the same benefits, or they could buy the system from the Co-op. Will the property be more difficult to sell because of the lease with the Co-op? We cannot predict what the future market for your property will be like, but the PV installation on the roof should increase the value of the property due to the lower electricity bill. Roof lease contracts of this sort are becoming increasingly common. What happens if the Co-op is wound up or bought out? Should the members of the Co-op decide to wind it up or sell it, the assets must be transferred to a society with similar aims and an asset lock. This asset lock ensures that the assets of the Co-op will be held in perpetuity for the benefit of the community. Will I have to make alterations to my electrics or wiring if I rent my roof to you? Not usually, but for some larger installations we may have to arrange for a better connection between your property and the National Grid to handle the energy input. This is carried out in partnership with your energy supplier and will generally not affect your property s interior. Page 6/8

7 77 Stokes Croft, Bristol, BS1 3RD; tel: ; Self-assessment roof survey The roof survey below gives us a quick feel for whether your roof may be suitable for solar panels. Don t worry if you can t answer all the questions, we can help you with this. Here s some guidance on the sort of information we need: Tenure details: This is to help us understand what kind of a contract would be required for your roof, and how many parties would be involved. We are interested in whether the building is owner-occupied, the length of the contract, the notice period, and whether there is any long term commitment to the usage type of the building. Technical questions: The exact answers to these questions will be provided later by a professional PV installer and a structural engineer. These questions are just to give us an indication of the suitability of your roof for PV, so please give us as much detail as you can, but don t worry if you are not certain of the answers. Orientation: The efficiency of the PV installation depends on how southern the orientation is any orientation between ESE and WSW is acceptable, but the more south facing the better. Angle of roof: What is the pitch of the roof? This is the angle from the horizontal if the roof is flat, the angle would be zero degrees, if the roof was a vertical wall, it would be 90 degrees. The angle where PV is most efficient is 30 degrees, but other angles can also be OK. Visual description of the roof: Please enclose photos of the roof taken from the ground, or from the roof if it is easily and safely accessible. Photos of anything that is likely to shade the roof are particularly useful e.g. trees, chimneys, surrounding buildings. What is the roof made of (tiles, felt, slate, corrugated metal? How old is the building? Have you had major works done on the roof before? How old is the roof? Access to roof: Is the roof safely accessible without scaffolding? If so, who has access to it? Current electricity usage: If you can tell us the amount of electricity used in the building from your last 4 quarterly bills, this will help us estimate how much of the electricity from the panels you would use. Electricity meter: Please provide a photo of your electricity meter. Are you on single-phase or 3-phase? Also, are you on half-hourly billing? Page 7/8

8 The survey Organisation name Address Postcode Lead contact (Name/tel/ ) Tenure (delete as appropriate) If you are a tenant, who is your landlord, and how long is there remaining on your lease? Owner occupier / tenant Does the building have an Energy Performance Certificate, and if yes, what level is it? Exact location of roof(s) Orientation of the roof(s) (delete as appropriate) Angle of roof(s) from the horizontal Visual description of the roof(s) Please attach a Google map image identifying the exact roof ESE SE SSE S SSW SW WSW W Access to roof(s) Current electricity usage: The number of units of electricity used in the building each quarter for the last 4 quarters Q1: Q2: Q3: Q4: Electricity meter details and photo Page 8/8