SHARING THE FEED IN TARIFF IN A FAIR AND EQUITABLE WAY

1. SHARING THE FEED IN TARIFF IN A FAIR AND EQUITABLE WAY Empower Community Community Energy Solutions

2. Community Energy Solutions • Established 2006 • Setup supported by DTI and YF / One NE • Community Interest Company • Whole house whole community approach • Experience in off gas projects • >4,000 homes connected to the gas network • >800 heat pump installations • 10,000 homes inc in area based initiatives • Development of group heating schemes

3. Empower Community Fund • Social enterprise-based • Rapidly scalable balanced stakeholder model • Sharing the feed in tariff in a fair and equitable way • Mechanism for investment at a community level • Promotes community revenue share and asset ownership • Transition tool to strengthen resilience of local communities

4. Market Need and Objectives • Energy security + 34% carbon reduction by 2020 • £300bn+ investment requirement • Large-scale uptake of distributed energy and energy efficiency measures • Resource allocation for social and environmental benefit • Encourage large-scale community participation, ownership and responsibility • Community engagement (public/private/civil) and local ownership of assets

5. Funding For Renewables Repayment on Capital Plus Revenue Stream UK Law from April 2010 The Feed in Tariff Pays for Electricity Generated Index linked Guaranteed for up to 25 years Use of Electricity Pays for Electricity Exported

6. Funding Options Funding Model Self Funded • No capital investment • Share in the FiT Income • Supply agreements in place • Maintenance, administration and insurance paid through the model • Stakeholder partnership opportunities • Inclusive of others • 100% FiT Income for 25 years • Need to raise capital with exposure to the financial markets • Tender for supply and fit • Assets are on balance sheet • Full risk management • Monitoring & maintenance • Administration of FiT • Insurance of systems • Inclusive of others?

7. CES Funding Model - Overview • No capital investment required • Significant share in the FiT Income • No maintenance, administration, or insurance issues to worry about • Social equity through inclusion of private households • Stakeholder partnership opportunities

8. COMMUNITY FUND Solar PV Funding Model Phase 1 – Establishment ROOF OWNER CAPITAL REQUIREMENT PROJECT SPV SUPPLY, INSTALL & OPERATE ENERGY COMPANY TURNKEY CONTRACT FEED IN TARIFF REVENUE AGREEMENTS PROJECT ASSETS

9. COMMUNITY FUND Solar PV Funding Model Phase 2 – Operation ROOF OWNER Property Owner License Fee LOCAL COMMUNITY FUND INCOME TO REPAY INVESTMENT CAPITAL PLUS A VIABLE RETURN PROFITSHARE HELD IN TRUST FOR THE COMMUNITY PROJECT SPV ENERGY COMPANIES OPERATE & MAINTAIN FEED IN TARIFF REVENUE PAYMENTS OPERATOR FEE PROOF OF GENERATION PROJECT ASSETS

10. The Funding Model - Summary • 25 year roof access agreement • No capital requirement from roof owner • Feed In Tariffs paid to Project SPV • Operator fees paid from FiT revenues • Roof access payments to roof owner • Profit share to Local Community Fund • Tenants/Occupiers receive free generated electricity

11. Project Benefits • Substantial revenue share - y1 to y25 • No capital outlay or maintenance cost to roof owner • Lower emissions and improved building stock • Flexibility over buildings included • Complete supply, install and operate package • Proven delivery partners • Local asset ownership after 25 years • Opportunity for local employment and training • ‘Halo effect’ for other building owner/occupiers • Very low risk for all local stakeholders

12. PV - not onlyinstalled on roofs! EMPOWER COMMUNITY

13. Community Energy Solutions Empower Community Lee Cattermole 0113 237 2723 lee.cattermole@communityenergysolutions.org.uk