Just 10 new community energy schemes registered after Tories cut subsidies

The number of new community-owned renewable energy projects of the sort backed by Jeremy Corbyn this week has plummeted after a series of government decisions have made many proposals for wind and solar farms no longer viable.

Only 10 new community energy organisations have been registered so far this year, compared to 76 last year, according to new data from the trade body Co-operatives UK.

The fall has been directly attributed to policy reforms in the last two years as government ministers noticeably cooled on renewable energy before and after the 2015 general election, with subsidy rates slashed and tax relief ended.

These changes stand in stark contrast to the promises made this summer by Theresa May of a windfall for local residents from fracking operations, which could amount to thousands of pounds per household.

Corbyn, the Labour leader, has put reversing Conservative energy policy at the heart of his environmental agenda revealed this week. Billed as policies for “the 60 million not the Big Six” energy suppliers, the manifesto included pledges to ban fracking, generate 65% of electricity from renewables by 2030, and to restore the department of energy and climate change. He pointedly emphasised the role of community energy schemes, which he said could help supply the 300,000 new jobs he envisages in green technology.

Community energy schemes, many of which are run or partly run by local volunteers and which invite residents to invest, can also benefit schools and other public buildings by reducing their energy bills. But they have suffered from the axing of key tax relief, increasingly complex regulations and the slashing of the feed-in tariffs meant to support the growth of solar panels.

MPs told ministers on Friday that key targets for renewable energy by 2020 were unlikely to be met.

The revelations come even as polls continue to show strong support for community renewable energy generation, with two-thirds of people surveyed by Co-operative Energy saying they would support community-owned renewable projects such as wind turbines and solar farms, and only 8% objecting.

Nearly six in 10 people thought the government should U-turn on the axing of tax relief on investments in community renewable energy, which has been one of the key factors in discouraging new projects.

Just over half of people would support a wind turbine within two miles of their home, and 61% would support a solar farm.

Co-operative Energy and the Energy Saving Trust calculate that a 25p annual surcharge on consumer energy bills would pay for community renewable schemes to increase from only 200MW of generation capacity today to more than 3GW.

Ramsay Dunning, managing director at Co-operative Energy, said: “This poll data shows that the government’s recent hostility to further growth in onshore wind turbines and solar farms is out of kilter with the vast majority of the UK public, including Conservative party supporters. People want to see growth in local community owned projects.”

Ed Mayo, secretary-general of Co-operatives UK, the trade body which has 120 community organisations as members, said the government’s changes meant people were being discouraged from schemes that provided a wide range of benefits and enjoy strong local support.

“Local communities have put in extraordinary efforts to encourage clean renewable energy in the face of extraordinary barriers put in their way by national politicians,” he said. “This hopeful and grassroots movement [has been] dealt a hammer blow, causing confusion and bringing growth to a virtual standstill.”

One example is Chester Community Energy, which aims to put 50kw of solar panels on a council-owned leisure centre. Fortunately for the organisers, they were in time to secure the old higher feed-in tariff rates before they were reduced. Without this boost, the scheme would not have gone ahead. Francesca Moore, a founding director, said: “We would not have done it. We would not have been able to give a return to investors. We might have been able to squeeze one percent but that’s not enough for people and we wouldn’t have been able to generate a community energy fund.”

Other proposed projects, including those by established community groups, are also facing financial troubles. Will Cottrell, chairman of Brighton Energy Co-operative which has raised more than £1m, said new projects were not feasible. “January’s feed-in tariff cuts mean that new projects are not financially viable. What’s the point in starting a community energy scheme when you can’t offer members interest [payments on their investment] or community funds?”