Business models and financial characteristics of community energy in the UK
File(s)
Author(s)
Type
Journal Article
Abstract
Community energy projects take a decentralised and participatory approach to low-carbon energy. We present a quantitative analysis of business models, financing mechanisms and financial performance of UK community energy projects, based on a new survey. We find that business models depend on technology, project size, and fine-tuning of operations to local contexts. While larger projects rely more on loans, community shares are the most common and cheapest financial instrument in the sector. Community energy has pioneered low-cost citizen finance for renewables, but its future is threatened by reductions, and instability, in policy support. Over 90% of the projects in our sample make a financial surplus during our single-year snapshot, but this falls to just 20% if we remove income from price guarantee mechanisms, such as the Feed-in Tariff. Renewed support and/or business model innovations are therefore needed for the sector to realise its potential contribution to the low-carbon energy transition.
Date Issued
2020-02-10
Date Acceptance
2020-01-10
Citation
Nature Energy, 2020, 5 (2), pp.169-177
ISSN
2058-7546
Publisher
Springer Nature
Start Page
169
End Page
177
Journal / Book Title
Nature Energy
Volume
5
Issue
2
Copyright Statement
© The Author(s), under exclusive licence to Springer Nature Limited 2020.
Sponsor
Engineering & Physical Science Research Council (E
Engineering & Physical Science Research Council (EPSRC)
Grant Number
PO 1829620 - EP/L024756/1
EP/L024756/1
Subjects
Science & Technology
Technology
Energy & Fuels
Materials Science, Multidisciplinary
Materials Science
RENEWABLE ENERGY
OPPORTUNITIES
PERSPECTIVE
BARRIERS
TARIFFS
GERMANY
SECTOR
0906 Electrical and Electronic Engineering
0907 Environmental Engineering
Publication Status
Published