£15 million for community-owned renewable energy in England

A new £15 million government fund has been launched to support community-owned renewable energy projects in England.

The Rural Community Energy Fund (RCEF), which is now open to applications, is targeted at helping rural communities pay for the cost of feasibility studies into renewable energy projects, and fund the costs associated with applying for planning permission.

But the fund stops short of paying for the actual installation of the renewable technologies. Instead, the hope is that projects will then be able to attract private finance to get projects up and running.

Crowd-funding is proving to be a popular way of attracting such finance. The most recent project to be funded this way is a community-run hydro-electric scheme on the outskirts of Edinburgh, Scotland. Harlaw Hydro raised £313,000 through a ‘community share’ offer to fund the installation.

Additionally, the Co-operative Bank’s loan fund, the Co-operative Enterprise Hub are offering support for renewable energy with their campaign for a Clean Energy Revolution in communities across the UK.

Within their £1 billion commitment to fund energy efficiency and renewables is a £100 million fund for small-scale community renewables and tackling reductions in fuel poverty.

The RCEF funding can be used to support most renewable or low carbon technologies, including: wind, solar, biomass, heat pumps, anaerobic digestion, gas Combined Heat and Power and hydro.

Energy and Climate Change Minister Greg Barker said that he hoped the funding would "help kick start hundreds of clean green energy projects in rural areas across England. Not only can local generation bring people together, boost local economies and drive forward green growth, it can help save money on energy bills too.”

Environment and Rural Affairs Minister Richard Benyon added: “As well as boosting renewable energy production, the Fund will ensure that communities have the funding they need for local projects and priorities in future.”

The RCEF offers funding in two stages: a grant of up to £20,000 for feasibility studies into renewable energy projects in local areas; and, upon successful completion of this, a loan of up to around £130,000 to help with project costs, such as seeking planning permission and relevant environmental permits.

The loan is repayable to the government once projects have been commissioned, with an additional premium of 45%. This cash is expected to be derived from the income generated by their projects. The government will reinvest it back into the fund to help support further projects.

The funding is a successor to the Local Energy Assessment Fund (LEAF) that was launched in December 2011. This has led to 236 community energy generation and management projects across England.

WRAP is, perhaps surprisingly, the delivery agency for the RCEF funding, with the application forms available on their website.

Applications will only be considered from rural communities with less than 10,000 residents and larger communities located in local authority areas defined as ‘predominantly rural’.

Applications will be reviewed on a monthly basis by the Department of Energy and Climate Change (DECC) and Defra with advice from WRAP, but there is no set deadline for submission of bids.