RCT Homes announces multi-million pound funded solar PV deal
Published by Alex Grayson for Empower Community Management LLP in Housing and also in Environment
Despite the arctic conditions of the last few weeks, social enterprise Empower Community and contractor Nationwide Solar have started installing photovoltaic panels on up to 1,000 houses owned and operated by social landlord RCT Homes.
Believed to be the largest domestic solar power project to be announced in the UK since Feed-in Tariffs were cut last year, the deal also breaks new ground with the arrangement of an insurance-backed solution to meet the requirements of the Council of Mortgage Lenders guidelines for lenders to housing associations.
The work will be carried out under the terms of the current Feed-in Tariff (FiT) at no cost to the landlord or to tenants. Once fitted, the panels will allow tenants to use as much of the free solar electricity generated as they wish during daylight hours. Research suggests this could supply up to 40 per cent of household requirements.
Overall, profits from the scheme will be shared with RCT Homes and the wider Rhondda Cynon Taff community and ownership of the assets will revert to RCT Homes at the end of the 20-year FiT period.
Alex Grayson, Empower Community’s managing partner said: “Despite the tight budgetary conditions determined by the current FiT regime, we are pleased to be able to have developed our second workable project. We’re still working with all aspects of the scheme, including with DECC and FiT, to try to include as many homes as possible.”
RCT Homes is Wales’s largest registered social landlord, owning and managing nearly 11,000 properties.
“We had always been interested in solar PV but we didn’t have the funds to go it alone,” said RCT Homes Deputy Chief Executive Malcolm Wilson. “When Feed-in Tariffs were first announced in 2010, we had to fend off potential suitors with a big stick. Most were predicting an income stream running into hundreds of thousands of pounds a year but they were mainly companies that were in it only for profit. The offers disappeared overnight when feed-in tariffs were cut.”
“We were never in it for the money,” said Malcolm Wilson. “We are more interested in attacking fuel poverty. Empower Community Solar has a community-focused, ethical approach.”
The deal will enable up to a thousand families to enjoy cut-price – and often free – electricity during daylight hours. Empower Community Solar expects the payment to generate electricity to yield a steady income for twenty years, even at the new, lower tariff.
In an innovative deal, Empower Community Solar will share profits with Meadow Prospect, a regeneration charity that is a subsidiary of RCT Homes. The money will be ring-fenced by the charity for investment in further energy-efficiency measures such as energy-saving advice, energy monitors and low-energy light bulbs.
“In a good year, we might make up to £50,000, but we’ll be happy as long as the scheme breaks even,” said Malcolm Wilson. “The important thing is that we expect tenants to save an average of around £120 per year from their energy bills.”
Rob Beiley, Partner at leading public sector law firm Trowers & Hamlins, who advised RCT Homes on the project documentation and in negotiations with RCT Homes’ lenders, commented: "We are delighted to have advised on such an innovative and worthwhile venture. Notwithstanding the issues that social housing organisations face in putting these deals together, in the light of reduced Feed-in Tariffs and the need to obtain their funders' consent, this project shows how innovative thinking can still make solar PV work."
The deal with RCT Homes is the second major social housing solar PV scheme to be announced by Empower Community Solar and its installation partner, Nationwide Solar, in recent months, with a project for City of York Council delivered last year.
6 Feb 2013
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