Solar firm in talks to rescue 30,000 stalled roof projects

Published by Ross Macmillan for 24dash.com in Housing and also in Communities, Local Government

A renewable energy firm is in talks with a number of social landlords to resurrect shelved solar schemes as part of the Government's planned cuts to the Feed-in Tariff (FIT) subsidy.

Strategic Energy has created a system with Ernst & Young, the Council of Mortgage Lenders and some of the UK’s leading law firms to make the FIT viable at the lower 21p and 16.8p rates which come into effect from April 2012.

Strategic Energy says that if its discussions with landlords and councils reach fruition, it could end up resurrecting schemes totalling some 30,000 roofs for projects between Edinburgh and Plymouth.

It has created a comprehensive "no cost" solar photovoltaic (PV) panels package for social landlords, while retaining significant rates of return for private equity investors.

The package sees Strategic Energy covering landlords’ outlay of legal costs for PV panel schemes through its associations with Trowers & Hamlins, Addleshaw Goddard, Cobbetts, Croftons and Hammonds.

A number of landlords had put their schemes on the back burner last year after the Government announced it was halving the 43p subsidy and that the lower rate would apply to installations from 12 December 2011.

However, a subsequent court ruling prompted the Government to extend the deadline to 3 March.

One of the landlords to profit is Manchester-based St Vincent’s Housing Association.

Strategic Energy fitted 400 panels for the landlord before the initial 12 December cut off date. It's now installing 300 more.

It means the 3,000-home landlord will retrospectively receive rent on 700 roofs should the FIT revert to the higher rate until 3 March.

Strategic Energy Director, Martin Davidson, said: “St Vincent’s Housing Association forged ahead with their PV programme by taking advantage of our pure equity FIT model that is viable at the 21p rate.

“Their primary reason was to reduce fuel poverty among tenants, lower CO₂ emissions and sustain local jobs; however following the High Court ruling they will receive the rent-a-roof model if the FIT returns to the 43.3p rate.

“Even if it stays at 21p they still get free PV, free electricity for tenants that will lower bills by up to £250-a-year, help maintain jobs and reduce their carbon footprint by 700 tonnes per year.

“We are in advanced talks with several other landlords who have considered our model and are keen to capitalise on our ability to start on-site quickly.

“Our association with law firms Cobbetts, Trowers & Hamlins, Addleshaw Goddard, Croftons and Squire Sanders means all the legal documents are drawn up and we cover the legal costs.  We also have the workforce, stock and materials ready to use.

“The framework is compliant with the Council of Mortgage Lenders and also overcomes problems landlords have faced trying to obtain lenders’ consent with approval granted by Barclays, HBOS and Dexia.”

Strategic Energy has two financial backers; one an institutional investor, the other is specialist clean technology company, Hazel Capital.

Its pure equity model means none of the returns from the FIT need to be used to pay the cost of the debt.

Chief Executive at St Vincent’s Housing Association, Peter Smith, said: “It is vital that social housing landlords take a lead in helping households to save energy and reduce fuel costs.  We will be using any extra FIT income to invest in further physical measures.”