Andrew Dubock, Communications Manager at Plunkett UK, explores how using social investment could support a new generation of community businesses to invest in energy saving measures, to make the businesses ‘greener’ and also reduce running costs.

Research published by Plunkett UK in 2023 highlighted a genuine commitment from community-owned businesses to take positive action on environment related matters. 

According to their ‘Community ownership: A Better form of Business’ report, 96% of the national network took some form of climate action last year. This included sustainable food production, reduction in waste and sourcing responsibly from local suppliers. Some 58% of community businesses also installed energy saving measures to reduce their carbon footprint, as well as lower their running costs. The research also showed that a further 49% of businesses are considering taking similar energy saving measures in future. 

The most frequently cited obstacles to improving energy resilience were difficulties due to cost and also where the business is located (often rural, sometimes in a building with listed status or in a conversation area). 

Could social investment, a form of repayable finance, be part of the solution to unlock the next generation of environmentally-conscious businesses? Would a new community share offer, or access to loan finance, help to mitigate the cost barrier that is currently holding up some businesses? 

What is meant by ‘energy saving measures’?

In response to the rising cost of energy supply, businesses across the country have been encouraged to consider how they can reduce energy consumption. As this UK Government website shows, there are simple changes that every business can make to reduce their usage. 

For some, however, the need to reduce costs has led them to look at longer-term actions which require investment. Examples of these actions might include:

•    Replacing boilers with greener, more energy-efficient systems
•    Installing solar or photovoltaic panels to generate energy
•    Improving the insulation of the business premises

Insulation being installed on a community building

What costs are involved? 

This will vary dependent on the building, with properties in rural areas, where the majority of community businesses supported by Plunkett reside, operating from traditionally ‘hard to heat’ (inefficient) buildings which are also often ‘hard to treat’ (expensive / impractical). As such, the amount of money required can range significantly from business to business and may also be affected by where they are located and the make-up of the building.

It is likely that any group looking at investing in energy-saving measures may need to use a blended approach to raising the finances they need. There is some support out there which will help groups to access grants and loans, but it is likely that communities will also need to raise some of the finance needed themselves. 

Any project should begin by completing an energy audit of the building, to assess what is possible and achievable in relation to what action could be taken. 

What support is available?

As well as being able to access advice and support from organisations such as Plunkett UK, community businesses may also be interested in looking at the following sources of additional support and finance.

The Energy Resilience Fund, run by Cooperative and Community Finance, is offering blended loan and grant finance to support community businesses to retrofit energy generating/saving technology on community owned or managed buildings. There is funding available for energy audits as part of this programme of support.

The Community Shares Booster Fund, run by Cooperatives UK, could be an option to raise ‘match equity’ for any community share offer looking at energy-saving measures. The fund offers to match the money raised for a community, providing the minimum share offer target is achieved. 

The VCSE Energy Efficiency Scheme, run by Groundwork, will help voluntary, community and social enterprises (VCSEs) across England to deliver more energy-efficient services by saving money on their energy bills.

Are there examples of community businesses to learn from?

In August 2023, The Dog Inn at Belthorn, a community-owned pub in Lancashire, installed embedded solar panels on their west-facing roof. The installation was part financed by a £10k loan, from social investor, Co-operative and Community Finance.

In March 2023, Talacre Community Sports Centre in London used a community share offer to fund the installation of solar panels at the centre. The project will save 12 tonnes of carbon each year.

In 2020, Farmborough Community Shop in Somerset, took the decision to launch an initiative to improve the energy efficiency of the shop. The required funds to support the installation of solar photovoltaic panels, alongside the purchase of more efficient electrical equipment, were raised through community pledges (shares) used to match applications for grant funding.

There’s also a range of case studies of social enterprises and charities using social investment to increase and improve their energy resilience. For example, read more about the experiences of Ambition Community Energy, a Bristol-based social enterprise generating clean and affordable energy run by the people of Lawrence Weston or Egni Co-op, a cooperative that has installed over solar panels on almost 100 sites across Wales to date. 

You can also watch a recent Let’s Talk Good Finance event on Energy Resilience to hear directly from three organisations that have taken social investment to implement sustainable energy sources, scale renewable energy provision or support other organisations in managing rising energy costs.

Learn more about using social investment for energy resilience via the Good Finance Energy Resilience Hub.