Recent changes to the third reading of the Finance Bill have pushed many community energy organisations to launch sooner rather than later to take advantage of EIS tax relief while still available to their investors.
This has triggered a surge in community energy share offers launching on Ethex, the positive investment and savings platform, including Bristol Energy Cooperative, Wolverton Community Energy (Milton Keynes), and Meadow Blue Community Energy (Merston, West Sussex) already open to investors with Bath and West Community Energy (BWCE), Wiltshire Wildlife Community Energy (WWCE) (Wroughton, Wiltshire), Nottinghamshire Community Energy (Colton Basset) coming on-line tomorrow (Wednesday 5 November). The offers launching tomorrow are all supported by Mongoose Energy.
Lisa Ashford, Chief Executive of Ethex, says: “We would like to see people investing in the wide range of community renewable schemes Ethex has listed in November to show the groundswell of support for the community energy sector in the UK.”
Jan-Willem Bode, CEO of Mongoose Energy says: “Since we launched this year we’ve helped communities from across the UK raise over £25 million for 27 such projects. The Treasury may have made a surprise announcement at the end of last month, but the cooperatives that are in a position to launch have reacted fantastically. And this means there has never been a better time to invest in these ethical-energy projects, be it to support your local area, to build your retirement fund, invest for your children, or simply buy an ethical Christmas gift for a relative.”
A sudden, and unannounced, change to the third reading of the Finance Bill at the end of October will have a large impact on community energy schemes in the UK. The Treasury has stated that community energy projects will be excluded from the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) tax reliefs as soon as the 30th November 2015.
They have further stated that community energy schemes will be excluded from Social Investment Tax Relief (or SITR), reversing the Government’s previous statement in March 2015. This leaves a small window of opportunity for community energy organisations to raise investment for projects in the pipeline under EIS and SEIS tax reliefs (see map of live community share offers in the UK below).
Coupled with previous changes to planning law and proposed reduction to the Feed-in Tariffs, these changes will put strains on the community energy sector. This is despite £36 million invested in 75 community energy schemes in the last year (see Ethex’s Positive Investing Report 2015, page 13), which leverages new investment into renewable energy. Most investment into community renewables comes from local people who want to back renewable energy schemes in their area and see the community benefit.
Community energy schemes result in an extraordinary range of community benefits beyond reduction of carbon emissions: support for fuel poverty, free energy provision in schools, improvements to community buildings, computers for low income schools, improving wildlife areas and providing local healthcare services.
The change in legislation applies to community energy organisations that are registered as community benefit societies (IPSs) or community interest companies (CICs) and have community benefit embedded in their rules or articles of association. These community benefits had, until now, been supported by individual investors encouraged by the 30% tax relief. Many of these schemes may not go ahead and the carbon reduction and all the community benefits lost.
This policy change has not been consulted on and goes back on previous promises to allow community energy schemes to benefit from the new Social Investment Tax Relief (SITR). And, what’s more, there hasn’t been adequate warning of the closure of the current tax relief mechanisms, which undermines investment in the sector.
Community energy schemes are currently eligible for Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) relief. This was to be removed but a six-month transition period SITR was to be permitted in order to allow all schemes to make advance applications for relief to HMRC and then to have time to complete their offers. However, EIS and SEIS relief is now to be withdrawn with no prospect of SITR available.
It’s hard to understand Treasury’s rationale for the switch. Community energy raised £36m last year and has been the fastest growing area of community investment. That would have cost £11 million in tax relief. But even then that has to be balanced against jobs created, VAT, income tax and National Insurance collected, and carbon saved.
The Community Energy England survey, published in October, found that 38 of the community energy groups surveyed had received £7.4 million in Feed-in Tariff subsidies since the scheme began in 2010, which has brought in £50 million of private investment and generated £45 million for local economies. The tax reliefs are important to community energy projects as the risks are often higher than commercial projects as returns to investors are capped to maximise the community benefit they generate.
Emma Bridge CEO of Community Energy England says: “Community energy enables people to take greater control over how energy is generated as well as ensuring wider benefits are fed back to the local area. Schemes offer a range of benefits from reducing energy bills and developing skills to generating revenue in the local economy, as well as the more obvious benefit of encouraging the production of cleaner energy.”
Given the potential that community investment has shown to deliver strong social and environmental benefit to society, at little or no cost to the tax payer, it is surprising that Government shows so little inclination to support it. There has been no prior warning of this policy change and no explanation of why the government has decided to take this step.
One hundred and fourteen organisations – including Ethex and Community Energy England – have now signed a letter to the Chancellor, the Rt Hon George Osborne MP to ask him to reconsider the proposed amendments to the Finance Bill. This is perhaps the largest mobilization of community energy groups yet.
Is Wood Burning Sustainable For Your Home?
Wood is a classic heat source, whether we think about people gathered around a campfire or wood stoves in old cabins, but is it a sustainable source of heat in modern society? The answer is an ambivalent one. In certain settings, wood heat is an ideal solution, but for the majority of homes, it isn’t especially suitable. So what’s the tipping point?
Wood heat is ideal for small homes on large properties, for individuals who can gather their own wood, and who have modern wood burning ovens. A green approach to wood heat is one of biofuel on the smallest of scales.
Is Biofuel Green?
One of the reasons that wood heat is a source of so much divide in the eco-friendly community is that it’s a renewable resource and renewable has become synonymous with green. What wood heat isn’t, though, is clean or healthy. It lets off a significant amount of carbon and particulates, and trees certainly don’t grow as quickly as it’s consumed for heat.
Of course, wood is a much less harmful source of heat than coal, but for scientists interested in developing green energy sources, it makes more sense to focus on solar and wind power. Why, then, would they invest in improved wood burning technology?
Solar and wind technology are good large-scale energy solutions, but when it comes to small-space heating, wood has its own advantages. First, wood heat is in keeping with the DIY spirit of homesteaders and tiny house enthusiasts. These individuals are more likely to be driven to gather their own wood and live in small spaces that can be effectively heated as such.
Wood heat is also very effective on an individual scale because it requires very little infrastructure. Modern wood stoves made of steel rather than cast iron are built to EPA specifications, and the only additional necessary tools include a quality axe, somewhere to store the wood, and an appropriate covering to keep it dry. And all the wood can come from your own land.
Wood heat is also ideal for people living off the grid or in cold areas prone to frequent power outages, as it’s constantly reliable. Even if the power goes out, you know that you’ll be able to turn up the heat. That’s important if you live somewhere like Maine where the winters can get exceedingly cold. People have even successfully heated a 40’x34’ home with a single stove.
Benefits Of Biomass
The ultimate question regarding wood heat is whether any energy source that’s dangerous on the large scale is acceptable on a smaller one. For now, the best answer is that with a growing population and limited progress towards “pure” green energy, wood should remain a viable option, specifically because it’s used on a limited scale. Biomass heat is even included in the UK’s Renewable Heat Initiative and minor modifications can make it even more sustainable.
Wood stoves, when embraced in conjunction with pellet stoves, geothermal heating, and masonry heaters, all more efficient forms of sustainable heat, should be part of a modern energy strategy. Ultimately, we’re headed in the direction of diversified energy – all of it cleaner – and wood has a place in the big picture, serving small homes and off-the-grid structures, while solar, wind, and other large-scale initiatives fuel our cities.
7 Benefits You Should Consider Giving Your Energy Employees
As an energy startup, you’re always looking to offer the most competitive packages to entice top-tier talent. This can be tough, especially when trying to put something together that’s both affordable but also has perks that employees are after.
After all, this is an incredibly competitive field and one that’s constantly doing what it can to stay ahead. However, that’s why I’m bringing you a few helpful benefits that could be what bolsters you ahead of your competition. Check them out below:
One benefit commonly overlooked by companies is offering your employees financial advising services, which could help them tremendously in planning for their long-term goals with your firm. This includes anything from budgeting and savings plans to recommendations for credit repair services and investments. Try to take a look at if your energy company could bring on an extra person or two specifically for this role, as it will pay off tremendously regarding retention and employee happiness.
While often included in a lot of health benefits packages, offering your employees life insurance could be an excellent addition to your current perks. Although seldom used, life insurance is a small sign that shows you care about the life of their family beyond just office hours. Additionally, at such a low cost, this is a pretty simple aspect to add to your packages. Try contacting some brokers or insurance agents to see if you can find a policy that’s right for your firm.
Dedicated Time To Enjoy Their Hobbies
Although something seen more often in startups in Silicon Valley, having dedicated office time for employees to enjoy their passions is something that has shown great results. Whether it be learning the piano or taking on building a video game, having your team spend some time on the things they truly enjoy can translate to increased productivity. Why? Because giving them the ability to better themselves, they’ll in turn bring that to their work as well.
The Ability To Work Remotely
It’s no secret that a lot of employers despise the idea of letting their employees work remotely. However, it’s actually proven to hold some amazing benefits. According to Global Workplace Analytics, 95% of employers that allow their employees to telework reported an increased rate of retention, saving on both turnover and sick days. Depending on the needs of each individual role, this can be a strategy to implement either whenever your team wants or on assigned days. Either way, this is one perk almost everyone will love.
Even though it’s mandated for companies with over 50 employees, offering health insurance regardless is arguably a benefit well received across the board. In fact, as noted in research compiled by KFF, 28.6% of employers with less than 50 people still offered health care. Why is that the case? Because it shows you care about their well-being, and know that a healthy employee is one that doesn’t have to worry about astronomical medical bills.
Unlimited Time Off
This is a perk that almost no employer offers but should be regarded as something to consider. According to The Washington Post, only 1-2% of companies offer unlimited vacation, which it’s easy to see why. A true “unlimited vacation” program could be a firm’s worse nightmare, with employees skipping out every other week to enjoy themselves. However, with the right model in place that rewards hard work with days off, your employees will absolutely adore this policy.
A Full Pantry
Finally, having a pantry full of food can be one perk that’s not only relatively inexpensive but also adds to the value of the workplace. As noted by USA Today, when surveying employees who had snacks versus those who didn’t, 67% of those who did reported they were “very happy” with their work life. You’d be surprised at how much of a difference this could make, especially when considering the price point. Consider adding a kitchen to your office if you haven’t already, and always keep the snacks and drinks everyone wants fully stocked. Doing so will increase morale tremendously.
Compiling a great package for your energy company is going to take some time in looking at what you can afford versus what’s the most you can offer. While it might mean cutting back in other areas, having a workforce that feels like you genuinely want to take care of them can take you far. And with so many different benefits to include in your energy company’s package, which one is your favorite? Comment with your answers below!