Government to invest £10m in community energy projects

The government will invest £10m to encourage urban communities to develop renewable energy projects, as part of a number of proposals outlined today to help communities keep energy costs down.

As well as the £10m urban community energy fund, the government plans to invest £1m to extend a scheme that supports volunteers who help vulnerable consumers reduce their energy.

It has also proposed a competition, with a prize of £100,000, to incentivise communities to develop innovative energy-saving approaches.

“The cost of energy is now a major consideration for household budgets, and I want to encourage groups of people across the country to participate in a community energy movement and take real control of their energy bills,” said energy secretary Ed Davey.

“Community led action, such as collective switching, gives people the power to bring down bills and encourage competition within the energy market.”

Since 2008, at least 5,000 community groups have participated in energy projects in the UK. The Department of Energy and Climate Change claims that one energy-saving project in Cheshire saved households around £300 a year.

The government is pushing communities to generate their own electricity - to put pressure on energy suppliers to drive down prices and to cut carbon emissions.

Estimates suggest that energy generation schemes involving local communities, such as installing solar panels on social housing buildings, could supply enough electricity for one million homes by 2020.

As City A.M. reported on Monday, large companies such as supermarket chains are also getting in on the act, installing solar panels and biomass boilers to ensure security of supply and cut costs.