Powering up communities through renewable energy

Challenge

Energy is such a vital part of our lives, and yet we have next to no say in how it is generated, how much it costs us or where it comes from (currently, 95% of the UK’s energy market is controlled by just six companies). Community and local energy is one solution that helps to address multiple social issues facing the UK: fuel poverty, climate change and communities in decline. As the energy system changes, local and community generation provides a way to connect people, places and energy and generate income streams that can be vital for community organisations to become viable and maintain sustainability.

Approach

Leapfrog Bridge Finance helped turn what was initially a commercial opportunity into a social impact investment. The investment involved a loan to Gridserve to enable the construction of an 'ultra-advanced' solar farm in York. A key part of the investment is the establishment of a Community Benefit Fund which ensures a proportion of the surplus is used to support social wellbeing programmes in the local area, and finance fuel poverty reduction projects. Gridserve is also making a one-off £100,000 contribution to the fund upon completion of the project. A second site, also funded by Leapfrog, under construction in Hull will also be owned by Warrington Borough Council who will use the power to become the first local authority to power its offices, streetlights and several primary schools entirely from renewable energy.

Revenue model

Leapfrog Bridge Finance has provided £11m to the York project which will create investment income for the Council. The Community Benefit Fund will generate on average £85,000 per annum over 30 years.

Impact

The solar farm alone will produce enough electricity to power almost 11,000 homes and will save over 13,500 tonnes of carbon per year. Additionally, almost 200 acres has been given back to nature to protect species, through the introduction of bee hives and wild flowers.

The aim of the Community Benefit Fund is to enable individuals, couples, families who are in fuel poverty or deprivation and third sector organisations that support them to benefit from renewable energy and energy efficiency measures through the provision of advice, installation of technology, energy saving measures as well as other relevant support.