What does a football club in Manchester, a local food delicatessen on Crendon Street and a school photovoltaic system in Oxfordshire all have in common? Can’t guess? Well all exist because their supporters funded them. FC United is a supporter-owned football club in Manchester. It aimed to raise £1.5million for a new ground and has already raised £700,000 through a well-supported share launch. Like the shop Local Roots (33 Crendon Street in High Wycombe) they didn’t need conventional Banks alone to fund them. They could go much further – all they needed were a lot of friends.
The term is ‘crowd-funding’ and it is all the rage. Back in 2005, if a young and relatively unknown film-maker wanted to make a film about the oil economy, from a critical viewpoint, then she was not going to get that money from the film industry. Nor did she want to. So Franny Armstrong went public and rounded up like-minded folk who believed that such a story had to reach the big screen. The rest, as they say, is history. “The Age of Stupid” opened to rave reviews and the floodgates opened for a new way of financing socially responsible projects. All people had to do was BELIEVE in large enough numbers and then dig deep into their pockets. If the gamble didn’t pay off then they don’t get their money back – but there was a good chance that they would get what they paid for. It became a model of socially responsible business financing.
A similar model was adopted for part of the funding for the local food delicatessen “Local Roots” that opened on Crendon Street back in March this year. Some of the money came from the owner’s savings, some from the bank and the shortfall from the community. Why? Well it does limit the new owner’s risks & exposure somewhat but it goes far beyond that. If the community will fund a shop then they will shop there because it is in their interest to. They have literally “bought into it”.
This has not escaped the attentions of folk wanting to drive renewable energy into our local economy. Oxford North Community Renewables Limited (ONCORE) was set up by Low Carbon Oxford North (LCON), to fund the installation of solar photovoltaic (PV) panels on the roof of The Cherwell School. They aimed to raise a minimum of £145,000 through community investment, to fund an installation of around 250 panels (50kWp) in 2011. The offer was so successful that the Directors of ONCORE decided to close the share offer early. They had MORE money than they asked for. In the middle of a recession. Blimey.
So in October 2011 the model of a renewable energy co-op came to the Chilterns in the shape of the “Low Carbon Chilterns Co-op” (LCCC for short). Its intent was to put solar panels on the roofs of community and other suitable buildings at no cost to their owners or management committees. In return they would get to use as much free energy as it is being generated. The Community Energy Co-op will get the Feed-in-Tariff which will be used to fund a scheme to assist members of the community with energy saving and renewable energy advice, and will also pay a dividend to people who invest in it. Local residents, parents, or other local interested organisations can buy shares in the Co-op, and would receive around a 4% to 7% return on their investment. The investment may also qualify for EIS tax relief.
Now remind me, exactly how much interest are YOU earning off money in the bank these days?
YOU can invest up to £20,000 in the LCCC. You will eventually get your money back, but there is no guarantee when – it is dependent on the availability of funds held within the co-op. The idea is that if the co-op can build up a portfolio of projects, it will eventually enjoy a good cash flow which ought to enable it to take on new solar PV projects which have a community or social dimension. This it can become a virtuous cycle. You can learn more about the LCCC at www.lowcarbonchilterns.org.uk. Minimum investment is just £50. The price of a tank of petrol these days. All we need are roofs and supporters… Now let me see. Hmmm… Lots of schools. Lots of empty roofs. Lots of parents of children at these schools. No wonder schools were originally targetted but the offer is open to any public building with the right sort of roof for photovoltaic panels – the solar panels that generate electricity.
This is not all. Crowd-funding and Co-ops are but two methods for getting communities involved in local socially-beneficial Business and Infrastructure. Another avenue is SIPPs – the Self-Invested Personal Pension – this is where your pension scheme is invested into projects that YOU choose within your community. Then there are Local Community-Owned Energy Companies like TRESOC in Totnes and OVESCO in Lewes (both prominent Transition Towns). They crowd-fund an initial lump sum and then use it to raise more equity with more conventional financial institutions. If that doesn’t take your fancy then there are community shares and bonds – these differ because they actually give you part-ownership of the project you are investing in. And then there are further models being developed specifically for Transition Initiatives. You can learn of them via Rob Hopkins’ “The Transition Companion” or go online to Community Shares at http://bit.ly/KZe1o0. Clever stuff.
The LCCC is planning photovoltaic panels to capture the energy of the sun but this is not the only technology that makes clean electricity. Consider this: the U.K. is home to 4.5-gigawatts of onshore wind energy, making it the eighth largest harvester of wind energy on the planet. There is another 1.4 GW of wind farms under construction, 4 GW that have been approved but not yet built, and a further 7.7 GW of onshore projects in the planning process. If we could get wind farms through the planning process then wind capacity would double in the UK. Double. Despite over-whelming support for wind power in opinion poll after opinion poll it seems few people want one near them. But what if everyone owned part-share of the wind farm near them? What if it was YOUR wind farm, your turbine? What if those turning blades were pumping £10 notes into your wallet or purse?
In the coming century we will see a drift away from top-down hierarchical models of energy generation and distribution. The energy internet is coming. We will all be producers, we will all be consumers: the “prosumer” is born. Electricity will become a peer-to-peer system: I’ll sell you some of mine/you buy some of his/I’ll buy some back. It won’t just be sent to us in the new smart grid. It won’t be THEIR’S anymore. It will be OUR’S. We will all be participants in the Third Industrial Revolution and it brings the prosperity this nation is struggling to return to. It is already working elsewhere and it will work here. You just have to believe…..
….it starts with just £50.
If you are interested in investing in the LCCC, or have a potential local building that could benefit, then there will be a meeting at Wycombe Environment Centre on Thursday May 31st at 7.30pm. Alternatively contact Transition Town High Wycombe or the Wycombe Environment Centre who can put you in contact with the LCCC organisers.