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Economy

Why investors should consider community-owned renewables

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On Brixton’s Loughborough Estate in south London, two community-owned solar energy projects – Brixton Energy Solar 1 and 2 – are providing power to social housing while also funding a scheme for energy-saving improvements, education and training to help alleviate fuel poverty. Now a third project, Brixton Energy Solar 3, has been launched by the same group on the nearby Roupell Park Estate. All three schemes rely on investments from ordinary people.

I visited Brixton Energy 2 for my new book, The Armchair Activist’s Handbook, which looks at alternative ways to take action away from chants-and-banners protest. I wanted to find out whether investing in this type of project could be a valuable way for people to make a difference.

Standing on the top of one of the housing estate blocks and speaking to the project’s founder Agamemnon Otero, I felt that Brixton Energy promises real positive potential for this part of London, and for those wanting to invest in a greener world.

The projects offer investors the opportunity to give practical support to a growing renewable energy movement, to reduce fuel poverty, and to take some control of the energy sector at a time when there is a fair amount of discontent surrounding the conduct of the ‘big six’ energy firms. Brixton Energy estimates that the Roupell Park project will provide an average annual return on investment of approximately four per cent and investors will be able to claim a 50% lump sum tax deduction in year one.

On a wider scale, there is evidence out there to suggest that community-owned renewable energy can really make an impact. Back in 2012, a report from thinktank ResPublica argued that involving communities in energy provision has tangible benefits for environmental, social and economic targets in the UK.

More recently, a report by Smartest Energy, a purchaser of energy generated by the independent energy sector, argued, “The combined impact of a large number of independent schemes is starting to make a difference to the nation’s climate change targets”.

It added that renewable energy projects developed by businesses, communities, farmers and the public sector now have enough combined generating capacity to power nearly four million households – enough for the south-east of England – and are generating £768m worth of electricity.

In addition, the government is showing an interest, having just concluded a consultation with the stated intention of unlocking the potential of community energy. The UK’s first ever Community Energy Strategy is to be published in the autumn.

There seems to be an appetite for investing in such projects. A recent poll for the Institution of Mechanical Engineers showed that a third of us would consider personally investing in small-scale community renewables such as wind farms, solar arrays or small-scale biomass plants. Fifty one per cent of people think the government should support the construction of more renewable energy sources such as solar, wave and tidal power.

Part of the reason the sector is gaining ground, perhaps, is that making an investment is becoming increasingly accessible. Sites such as Abundance Generation, which launched last year, link up communities and individuals with renewable energy projects.

Abundance says it aims to double investors’ money and argues that energy projects offer long-term, predictable returns, among other benefits. So far, a total of £2.3m has been invested through the site.

Microgenius is a similar website that links investors with community shares projects, including community energy schemes. And there is Energy 4 All, which supports eight renewable energy cooperatives. Its latest project, the Spirit of Lanarkshire Wind Energy Co-operative, has attracted more than £600,000 in its first month.

It’s not necessary to live in the local vicinity of an energy scheme to sign up as a backer, although those based nearby will be able to see more clearly – and even directly experience – the benefits of where their money is going.

For Otero, community-owned energy is about offering an alternative that benefits people and planet, showing consumers that they can stop renting energy and start owning it. At the moment, the project is required to sell most of its energy back to the grid, but it has big ambitions: in the long-term, Brixton Energy would like to be able to set up as a provider and sell energy directly back to investors and those living in the local area.

According to the Community Energy Coalition, more than 20% of Germany’s electricity is produced from renewable sources, with communities generating about a quarter of this. In the UK, less than 1% of renewable energy is generated by communities, but Germany shows that it can be scaled up.

As with any investment, there will always be risks (a summary of which can be found in the offer document of any project). But I’ve come to believe that projects such as Brixton Energy can be a way for investors to become activists. For those with money to invest and a desire to support a more sustainable future, this is an area well worth looking into.

Ruth Stokes is a freelance journalist and author of The Armchair Activist’s Handbook. She tweets @ruth_stokes and @armchairaction, and has a website at www.ruthstokes.com.

Further reading:

Community energy: what you need to know

UK’s first Community Energy Fortnight set to create ‘clear pathway’ for local people

Manifesto published to accelerate ‘community energy revolution’

Harnessing the power of a community

The Guide to Limitless Clean Energy 2013

Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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