Edinburgh Community Solar Co-operative

Background

Since local elections in 2012 Edinburgh City Council is governed by a Labour and Scottish National Party coalition. The ‘Capital Coalition’ has a shared commitment to deliver on a number of pledges published under the coalition contract. This includes a pledge “to encourage the development of Community Energy Co-operatives”.

First to take advantage of this commitment is the Edinburgh Community Solar Co-operative (ECSC) that proposes to procure, install, own and manage solar PV systems on 25 roofs of buildings owned by Edinburgh City Council. The public buildings including schools, community buildings and leisure centres will carry a combined generating capacity of approximately 1MW – the largest scheme of this kind in the UK. The objectives of ECSC are to make ownership of renewable energy accessible to more people within the city of Edinburgh; help deliver low carbon initiatives for the buildings which host its panels; and help other community groups in the city that wishes to tackle fuel poverty or reduce carbon emissions.

Legal structure & set-up

ECSC is a registered Community Benefit Society (Bencom) under the Industrial and Provident Act 1965. This means it will follow principles outlined by the International Co-operative Alliance which includes giving each member one vote at their AGM, regardless of the amount of shares an individual holds. The ‘one member one vote’ principle is what makes co-operatives highly democratic in terms of governance structure. A board of trustees is responsible for the day-to-day running of the organisation.

Following a tendering process, ECSC has awarded a contract to help the founding members develop the scheme to Energy4All, a non-profit social enterprise that has helped form twelve other renewable energy co-ops in the UK.

Financing

ECSC will raise the required capital through a community share offer: ordinary people from across Edinburgh will become members of the co-operative by purchasing shares worth a minimum of £250 (€320) and a maximum of £100,000 (€125,000).

The co-operative will generate income through the sale of electricity into the national grid and Feed-in Tariff (FIT) payments. In addition, the Council will pay ECSC for solar electricity consumed on site, albeit at a lower cost, resulting in a reduction in energy bills for the Council. The Council will further benefit from a reduction in tax payments under the Carbon Reduction Commitment Energy Efficiency Obligation and help the Council meet its required contributions to the national emissions reductions target under the Climate Change (Scotland) Act 2009. Members of the co-operative will receive a capped 5% return on investment.

Surplus income generated will feed into a community fund which is intended to deliver on the objectives of ECSC.

There are substantial development and legal costs at the early stages of the project that arise for example, from surveys, lease agreements, procurement of panels, launching the share offer and project management. ECSC has received a grant from the Scottish Government’s Community and Renewable Energy Scheme (CARES) to undertake building surveys and intends to apply for a loan to complete the development work necessary to produce a public share offer and raise the money required to install the panels.