Bundling infrastructure at a community level to drive down costs and increase social cohesion
Description: Focussed on electricity generation and consumption this approach potentially is applicable to other infrastructure and services used by target communities. The idea is that a community or group of residents can pool their renewable energy generation so that anyone in the group can use it directly (rather than selling it to a supplier at 5p/kWh and buying back at 14p/kWh) and benefit from Time of Use Tariffs when they are purchasing (cheaper prices at time of day when power is cheaper).
Improvement: This approach potentially generates substantial cost savings where producers sell within the community rather than via the Grid. It saves on bills, saves carbon and spreads the benefit of renewables (not just those households with south facing roofs in the case of social landlords installing PV). It only works if a community works together. It retains income locally, which could be used to support other local activities linking energy to the rest of everyday life and it encourages social cohesion.
Mary Gillie from Energy Local’s Contribution to Rental Matters
Social landlords could consider themselves as working in partnership with the tenants to provide the services that they need (one being housing) and the income and staff to maintain those services. The more that is done as group and by the tenants or the more income they generate as a group the lower the bills. The range of services could include:
- Office space
- Creche, and
- Play areas/allotments etc.
The more services tenants receive at reduced cost the greater incentive to stay a tenant.
Below is one such example for energy in detail as this is Energy Local’s core competency. Similar arrangements could be used in other sectors as described.
Energy Local is a new business model that will allow a community or group of residents to pool renewable generation so that anyone in the group can use it directly (rather than selling it to a supplier at 5p/kWh and buying back at 14p/kWh) and benefit from Time of Use Tariffs (cheaper prices at time of day when power is cheaper).
It saves on bills, saves carbon and spreads the benefit of renewables (not just those households with south facing roofs in the case of social landlords installing PV). It only works if a community works together.
In the context of a new approach for a HA, tenants could receive a share of renewable generation funded by the HA in return for paying a low price. The HA gets an increased return from the renewables and the tenants get a lower cost of power. The income to the HA could then be reinvested in services (e.g. crèches etc. only available to tenants, or only available at a discount to tenants). This approach encourages community collaboration but also offers training and job opportunities.
Alternatively rents could be reduced by using the income centrally to reduce maintenance costs, on a large-scale to leverage funds for new housing or on further investment into income generating services and infrastructure, thereby increasing the virtuous circle already established.
Installations need not necessarily be on social housing alone but also communal buildings, council buildings or commercial buildings.
Similar arrangements could be made for communal heating sources – if there is excess heat available it could be sold to homeowners nearby at a higher price. Cheap heat is likely to protect buildings from damp as tenants are less likely to be afraid of not being able to pay heating bills and underheat homes as a result. In rural areas, there could be scope for creation of biomass fuels is there is land available. .
The cost of local organisation would reduce the savings but if the additional benefit in social cohesion, retention of residents and training and job creation would be substantial. Such an approach could provide a route for unemployed people to re-enter the work place, allowing a build up from few hours of volunteering or paid work to test their capability and rebuild a CV.
Not only would this approach make tenancy attractive, if residents sign up for a long term contract, they will be more reluctant to withdraw as financial benefits accrue. Furthermore it could be attractive to homeowners to buy the services increasing the demographic mix.
The hardest hurdle is getting over the upfront costs before the model is self-sustaining. It may also need to be carried out in a large number of areas as there would need to be a support network to ensure communities continued to be self-sustaining.
As this model is developed is may justify social landlords buying other businesses knowing they have the nucleus of a market. An existing example is Gentoo buying a Photo Voltaic manufacturer. Insulation, heating systems, parts for vehicles, children’s play equipment, building energy management systems, or data systems and services to support independent living might all be the focus of the above outlined approach.
About Dr Mary Gillie
Founder of Energy Local, Mary is an applied physicist by training but her career has been as an engineer. She loves new ideas and has run numerous field trials and feasibility studies to make our energy systems more efficient and to connect more renewables. She enjoys working with science and people to make our society and environment better for everyone. She has been bringing together the different components for Energy Local for a number of years.
You can get in touch with Mary at email@example.com.