Consumer (Co-)Ownership of Renewables in England and Wales (UK)

Abstract

In 2014, a Community Energy Strategy was introduced, to find ways of overcoming the barriers faced by community energy. In spite of some improvements with a change of government in 2015, this strand of work did not continue. The year 2015 also saw sharp reductions in FiT rates, alongside reductions in tax incentives and the closure of early-stage funding and support instruments. In this environment, community groups are attempting to adapt and innovate—ideas are being floated for new business models, new sources of funding, and new technologies. Furthermore, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. However, in the light of ‘Brexit’ the transposition of the RED II into UK Law until 2021 is unsure, although it would be an important legislative impulse as it introduces a legal framework for consumer (co-)ownership. Individual households can own RE installations, and use the power or heat directly, or sell to the grid, with investments in so-called Individual Saving Accounts being tax-exempt. Community ownership takes a number of legal forms, with the Industrial and Provident Society, a form of co-operative, being the most common type. Another option is the Community Interest Company, which is essentially a company working for the benefit of the community or a registered charity. Following the decline in support from the Feed-in Tariff in 2015–16, community groups have been looking at new business models for consumer (co-)ownership of energy, focusing on options for self-supply, where energy is used locally, not sold through the grid. Partnership with local authorities and housing associations to further local ownership of RE is also present.