Research finds renewable energy a powerful driver for local economies

Renewable energy schemes can stimulate local economies as well as delivering environmental benefits, research published by the Association for Public Service Excellence (APSE) has found.

APSE’s chief executive, Paul O’Brien, said: ‘Our new research demonstrates ways in which forward thinking councils have used renewable energy as a catalyst to stimulate employment, skills and supply chains locally – enhancing our ability as a nation to respond to expanding green economy opportunities.’

The research, commissioned by APSE and conducted by researchers at the Centre for Local Economic Strategies (CLES), features case studies from across the UK. It quantifies the benefits of renewable energy projects in terms of; payments from Feed In Tariffs (FiTs); number of people employed; value to supply chains; training and skills development; and savings in carbon emissions.

Powerful Impacts: Exploring the economic and social benefits of renewable energy schemes shows how £1 investment in those local renewable energy schemes that were early to get off the ground could deliver an average £2.90 in cashable benefits. It calculates that a typical scheme fitting solar pv to 500 homes can create 12 full time equivalent jobs and save 650 tonnes a year in carbon emissions.

Researchers also calculated the return on investment in light of latest information on reductions to FiTs for solar schemes and found this falls to £1.50.

Mr O’Brien commented: ‘While this is less attractive than the return on the trailblazing projects, with the rapid fall in the cost of solar pv it still represents a strong business case for investment. The wider benefits of reducing energy bills, securing energy supply, tackling fuel poverty, creating jobs and stimulating supply chains remain and council led projects can ‘lock-in’ those benefits. The impacts of renewable energy on local economies should be fully recognised in local decision-making and national funding mechanisms.’

Neil McInroy, chief executive of CLES said: ‘Local government needs to innovate and create new ways to generate income, stimulate local economic benefit and play a needed place leadership role in the face of environmental change and the need for energy security. Production of local renewable energy shows the way by which a green economy can be forged for the benefit of place, people and the local economy.’

For further information contact

Mo Baines, principal advisor at APSE, on tel: 0161 772 1810 or email: [email protected]

Notes for editors

1) The Department for Energy and Climate Change published three documents relating to its review of the Feed in Tariff (FiT) on 9^th February, which discuss the Government’s latest position and are available at:

http://www.decc.gov.uk/en/content/cms/meeting_energy/Renewable_ener/feedin_tariff/feedin_tariff.aspx

2) Whilst the case studies used in this scheme concentrate on solar, similar benefits are derived from other renewables initiatives such as wind, biomass, electric fleet and energy efficiency schemes.

3) Initial research was conducted in 2011 among authorities that were early to get renewable energy projects off the ground. Following announcements on proposals to change FiTs for solar schemes, return on investment was recalculated. This later calculation was based on published rates reducing the tariff for producers of renewable energy from 43.3p per kWh to 21p and 16p for multiple solar photovoltaic installations for projects with a ‘reference date’ of 3^rd March 2012.

4) The research used specifically designed methodology to quantify the environmental, social and economic impacts of renewable energy schemes. Researchers made their calculations using a baseline scenario of solar PV on 500 South facing buildings each with 1,900kWh. The model built in sensitivity tests for factors that are liable to fluctuations; principally FITs rates; borrowing rates, equipment costs and energy costs.

5) CLES researchers found critical factors are to deliver the micro-generation scheme at minimum cost and risks to the local authority and to ‘lock in’ economic benefit through fuel bill savings and working closely with installation companies to ensure transfer of knowledge and skills. The research found a direct local authority approach offers the most promising opportunity to control these factors.

5) APSE is a not-for-profit organisation representing some 260 local authorities providing front-line services across the UK. Its publication The Virtuous Green Circle in April 2011 set out how a ‘revolving fund’ for investment in sustainable energy can operate in local government.