A local authority in Suffolk has bought a 12.4MW solar farm, less than a year after rejecting an offer to get involved with the project.
Forest Heath District Council has purchased Greenheath Energy and the fully-operational for nearly £14.5m in a bid to help create an annual income for the authority.
The solar farm will generate a net benefit of £300,000 in the first year alone, according to the council. Not including, housing benefit subsidies, this will represent around 7.5% of Forest Heath’s total income for 2016/17. And within 10 years, the council estimates it will be generating around £700,000 a year.
Forest Heath was offered a chance to invest in the solar farm before it was built last year, but pulled out in September 2015, after due diligence checks highlighted several risks with the project. Since then, the government has dramatically cut the amount of money available for renewable energy subsidies – particularly around solar– and also announced big changes to the way Whitehall will finance local authorities, with the end of the revenue support grant by 2020.
Speaking to Environment Journal, the head of resources and performance for West Suffolk councils (Forest Heath and St Edmundsbury), Rachael Mann, said the local authority was originally offered a deal to take the project to build the solar farm on and develop it themselves.
‘Members felt it wasn’t an appropriate use of council taxpayers’ money given the risk that was associated with it,’ said Ms Mann. ‘That was all linked to our ability to hit the critical government funding, which ran out on March 31.
‘They [the developers] continued to develop it and came back and said “if we did deliver it as an operational solar farm, and hit the government funding, where would you be?”’
Critically, the developers were able to get the solar farm up and running in time to qualify for the ROC 1.3 band of government subsidy, which was one of the key risks identified by the councillors.
As the market matures, the feed-in-tariff will become less of a vehicle to make these projects stack up – Peter Gudde, service manager for environmental health
The two council’s service manager for environmental health, Peter Gudde, said the local authority has long-standing ambitions to generate renewable energy and is looking to develop other projects around power and heat.
‘We have a track record of investing to develop roof-based solar,’ said Mr Gudde. ‘We already have 1.2MW of roof-based solar on our own assets and businesses in West Suffolk. ‘As the market matures, the feed-in-tariff will become less of a vehicle to make these projects stack up,’ he added.
‘With changing technology, it’s likely these things will become favourable investment opportunities.’
Forest Heath’s cabinet member for resources and performance, Stephen Edwards, said the council is also planning to lobby the government to relax the rules over the generation of electricity and supply to local markets.
‘If successful that could allow us to offer our own branded tariffs to local businesses, proving them for the first time with stable energy supply costs, which in turn would help support local economic growth,’ added Cllr Edwards.
‘We would also like to be able to offer something similar to the vulnerable members of our community and will continue to explore how we can overcome the barriers in the market, in order to make this a reality.’