In a Sheffield church hall on Saturday, about 100 people were offered the opportunity to be part of England's largest community-owned hydro scheme. But to have a role in a national movement that fundamentally changes the way that energy is generated, the Jordan Dam project needs to reach a much bigger audience – and that is where Microgenius comes in.
Like many people I had looked into the possibility of installing solar panels on my roof, but the first installer took one look and shook his head. "Too angular," he said. So I started to look at other ways to invest in renewable energy and stumbled upon the community energy movement.
Co-operatives have been around since the 19th century, and increasing numbers of both co-operatives and community benefit societies (Industrial & Provident Societies) are being formed to install sustainable energy microgeneration using modern hydro, wind, solar and biomass technologies. They are selling community shares to ordinary people to make these projects a reality.
There are at least 59 energy co-operatives already registered across the UK, according to the Community Shares Action Learning Research Project and that's just the tip of the iceberg – there are many more bubbling under the surface.
The co-operative movement in general is going through a renaissance, both in the UK, where it has outperformed the economy for a fourth year running, and internationally, with 2012 being the UN's International Year of Co-operatives.
Managing share offers
One limitation for the projects seems to be the logistics of managing the share offers.
The projects generally rely on the support of volunteers who are learning about running the scheme as they go along. This already includes feasibility work, planning applications, getting to grips with the technologies and legal work. To all this, add the administration involved in selling community shares to new members and that is a lot of work for people who may also be juggling childcare or a day job.
Additionally, by their very nature the projects tend to be very localised. Within every community there is a finite number of people with the time and enthusiasm to get involved. To raise the sort of funds required to build these projects, a co-operative may need to tell people beyond its immediate supporter base.
As a potential investor, with money in my pocket, it was incredibly frustrating not being able to find a project to support. I had difficulty locating the projects and then engaging with them. Just dusting off my cheque book and filling in the forms in order to buy shares gave me a feeling of inertia.
I thought there must be another way to do this and came up with the idea of Microgenius – a national not-for-profit website that would link people with an interest in sustainable energy with communities developing micro-generation projects.
The website is built on a platform that is specially designed to support secure financial transactions, so societies have access to one of the best solutions in the modern finance industry.
The idea is to simplify the process of finding and purchasing community shares in renewable energy projects, and to be able to help disseminate best practice. This will streamline the process so that fundraising is more efficient and widespread for both investors and societies.
The prospects for investors are good. A community owned wind turbine in the village of Hockerton in Nottinghamshire, also funded by a community share offer, started generating power in 2010. In its first year it had generated as much power as the village consumed.
The Jordan Dam
Microgenius' first project is Sheffield Renewables. The share offer is to fund the development of a hydro-electric generator at Jordan Dam on the River Don and it will be part of Sheffield's first community-owned renewable energy scheme. The dam will produce 310,000 kWh of electricity per year, enough to power 80 homes and save 170 tonnes of CO2 equivalent. The share offer aims to raise £200k, and will pay up to 3% interest to investors plus possible tax relief, which would boost effective returns to 4.3%.
The minimum stake is £250 and the maximum is £20,000.
Community energy projects make money from the feed-in tariff (FIT) or the newer renewable heat incentive (RHI) subsidies, and power purchase agreements (PPAs). The subsidy incentives have been designed to accelerate investment in renewable energy technologies.
The tariff the project gets is fixed at the time of installation, so you don't need to be concerned about what then happens to the tariffs. The government has already announced a new community-level tariff, to come into force later in the year if approved: it shows how seriously community energy is being taken.
This is borne out by the estimated £25m that has been invested so far in community shares in renewable energy. When investors buy shares they become members of the society. Everyone gets an equal vote regardless of how much money you put in. They receive a social, environmental and financial return on their investment. For many people disenchanted with the financial system, this level of involvement and transparency is very appealing.
A new venture is exciting but a bit nerve racking too, so I have been delighted by the level of enthusiasm and support that I have received from the big players in the sector.
This has included the ethical energy provider Co-operative Energy, Co-operatives UK and renewable electricity supplier, Good Energy. Nigel Mason from Co-operative Energy captured it well when he said "We're committed to sourcing energy from renewable sources to provide our customers with clean, cost-effective energy. We were keen to lend our support to Microgenius as this will make it easier for individuals to support community-level green energy schemes."
Renewable energy is on the rise. A share issue by Ouse Valley Energy Services Company, which predicted a 4% return on investment, was oversubscribed. I am confident that Sheffield Renewables will be too.
Emily Mackay is the founder of Microgenius, the new funding website that brings together people who want to invest in sustainable energy with community energy projects.
This content is brought to you by Guardian Professional. To join the social enterprise network, click here.
