How to involve citizens in the financing of projects?

How to involve citizens in the financing of projects?
Published by Isabelle Meiffren on 25/09/2013

Under the program 100 RES Communities, the Pays de l’Albigeois et Bastides has initiated a study on the potential development of photovoltaics, while opening the debate on the opportunities for residents' involvement in the financing of projects. The French, like many other European householders have wool socks filled with good savings.

The idea is to offer people the "mobilization" of a portion of the savings on energy transition projects in their villages, where they live. 70 participants (politicians, technicians, institutions, agencies, associations, ...) are aware of devices that provide an opportunity for citizens to participate in the energy transition, and co-investing in projects with their local communities.

Interview with Julien Frat, coordinator of the Climate-Energy Plan of Pays de l’Albigeois et des Bastides.

Why open debate on civic investment around a study of potential development of photovoltaic roofing ?

 « We had to define our potential mobilization of different renewable sources. This work is part of it.Photovoltaic solar energy has a positive symbol - the sun. It is energy currently more consensual than windpower or micro-hydraulic. We can spread without too much difficulty, and make the process very visible. We have the possibility to make solar roofs of modest size, which require reasonable investment levels. A wind turbine, even a small one, is more expensive, …But the challenge now is to understand how we can stimulate a process of collective territory and time, and see if a dynamic can emerge with the locals ».

 Has reconciling community with energy become much less "profitable" since the decline in public support of the French state?

 Our communities are involved in a process of development of their heritage. Elected officials are not necessarily looking for a quick profit at any cost.The constant increase in electricity prices, the increases announced push to re-appropriate energy issues, also through the production of renewable energy. The major difficulty for our smaller towns, it is the lack of resources, technical, financial, tighter access to credit conditions. It is the role of the Pays to find collective solutions to break the feeling of helplessness, as has started on the Climate Plan.

 Why use the citizen savings?

We believe that this approach can recreate the sense of connection, cohesion. Beyond an economic boost. For Cecile Miquel, the French NGO Hespul, an NGO specializing in PV France, « citizen savings is relevant to projects, neither too big nor too small, projects which, by the purchase price, will apply for and receive any local government subsidies, have a longer return on investment too long for conventional investors. Today, schematically, PV projects at both extremes of the range, power plants on the ground and large roof on the one hand and domestic plants on the other hand, are properly supported by the framework set by the state: purchase price of energy, tax credit for households. Between these two extremes, profitability is sometimes longer to reach - even if it is generally acceptable, around 10 years.
But the strictly economic dimension may not be the only obstacle. In France we have a fee schedule that emphasizes the integration of sensors in the roof and discourages simple installation, laying the sensors on the roof, though simple and economical. It promotes the development of PV on new buildings, without starting a powerful   dynamic on the old.
The integration, partly for aesthetic reasons, requires rework of roofs and sealing which not only increase the cost of projects, but are also off putting to project owners. The PV option is more easily considered if significant work on the roof is programmed, insulation, or other…

 What is the method adopted by the Pays de l’Albigeois to develop its solar roofing project?

  • A wide range of information of all communities
  • Regionalised information meetings focused on communities engaged in efforts to control energy with the Pays
  • An inventory of buildings capacity to accommodate the solar roof on the first "core" of communities.

Regarding inventory, we make an on-site audit. An audit questionnaire would not have given the most reliable results.

We targeted inventory on the twenty municipalities involved in the action of Shared Energy Council, established in 2012 for which works on energy management are scheduled. This bias reinforces the energy coherence of the project.

 What are the first results of the inventory?

88 buildings audited over twenty municipalities: this inventory mobilised an "energy" technician for 3 months full time. It has identified a potential production of 470,000 kWh to about 3200 m2 equip able roofs, enough to provide specific power for 150 to 170 households (but double when finished, when we have all reached a factor of 2) .
Projects that were too close to classified or notable buildings were removed from the inventory, the legislation is very strict. Moreover, we do not exclude to inclusion in the operation of projects to be carried out live by households.

The next step?

Launching detailed feasibility studies of projects with municipalities, and start calibrating at least an order of magnitude for financing needs and capital.

The Pays de l’Albigeois must prepare the establishment of a group of orders for the purchase and installation of sensors, and lead the process. Communities have the opportunity in France to make control groups. We will obviously pool all that can be…

Finally, within the "collection of local savings component”, we will train ourselves for Shared Energy (EP)

Created by actors of renewable energy and finance solidarity, EP is a movement divided into two structures:  

  • NGO is responsible for promoting civic investment as a lever of the energy transition, and respect the charter of the movement
  • A finance company Shared Energy Investment, has the authorization of the financial markets to launch subscriptions.

 "Shared Energy" (Energie Partagée !)

In France we have the investment clubs, partners entrepreneurship in the field of local development. France now has Shared Energy Investment, a financing structure entirely dedicated to energy transition, which is a partner of choice for the territories 100% renewable energy.

What is Shared Energy? EPI occurs in the operational phase, once permits are obtained and other administrative permission.

With abundant capital funds, EPI allows the structure that will operate the project to have a majority of citizen investors in its capital and to obtain the necessary complement to obtain a loan.

In terms of status: EPI is a company limited by shares (SCA), a status already used by financial actors: there is a separation of ownership and decision making. Sponsors (investors) entrust the General Partner with the management of capital.

Shared Energy investment is backed by an organization that verifies compliance with the charter movement notably:

-       The really local character of the actors, local authorities, residents, and the quality of the connected shareholders,

-       Supervision of the profits for the benefit of the public interest

-       The transparency of decisions in a cooperative framework and democratic governance.

 Founded in 2012, Shared Energy has so far funded 25 projects, with many others in the pipeline, proving willingness of citizens to engage in energy transition, in a very concrete manner.

 The PV in France: (Source, Hespul, Ademe)

  •  4035 MW connected to the end of 2012 283,400 installations.
  • Less than 1% of the projects are plants with a capacity exceeding 250 kWp, but represent 43% of the installed capacity.
  • In contrast, domestic projects, the most numerous, total 16% of the installed capacity.

The sharp reduction in public support in 2009 has certainly burst a bubble, but it has also resulted in a loss of 15,000 jobs.

2012 saw the number of requests for connections fall sharply, even if in some configurations, the projects have an average payback time of 10 years.

Devices increases were established (tariff bonus depending on the origin of the panels) and established to try to stop them.

 

Power range (KW) Number (%)  (%) Capacité Installed
3 85 16
3-100 12 10
100-250 2 20
>250 1 43

 

The French strategy to support PV

  • Power below 100 kWp

Three types of buying tarif,

  • Integrated into building
  • Integrated in a simplified manner
  • Non integrated

 The purchase price for integrated is around four times higher than the non-integrated.

Rate increase by 10% if the panels are manufactured and assembled in the EU

Rate increase of 5% if the panels are made and assembled in EU

These purchase prices are reviewed quarterly.

  • Power between >100 and  250 Kwp

The bigger power systems are subject to call for tender

The prices offered by operators and granted are around 20 centimes (euro) per KWh.