More bang for your green buck: green income generation for local government

The outlook for the public sector at the end of 2010 was not good: the UK has slid into a serious recession, which combined with the banking crisis, has led to a budgetary crisis in the public finances not seen for many years. This has caused morale in local government to dip: people worry about their jobs, the services they provide and the potential to continue to deal with an ever-increasing workload. There is very much a need for some light at the end of the tunnel.

Climate change is a pressing new agenda. It has existed for some time but has come to the fore because of increasing greenhouse gas emissions targets (both nationally and internationally) and the creation of new financial incentives by the Government. Local authorities need to be part of this agenda but few chief officers in local authorities seem to have switched on to its significance.  One of the reasons why it is so important is that it offers huge local opportunities, as well as new burdens. To be well organized, each local authority should develop a holistic climate change strategy, setting targets and goals, building a route map towards them, and coming up with projects that form the steps on that path. A corporate approach is vital.

Solar photovoltaic panels to generate electricity are now one of the leading areas of renewable technology and this solution has been proved commercially successful around the world. Solar PV works in the UK, despite its cooler climate than Europe. The government has introduced new financial incentives for qualifying PV schemes, whether public or private sector. Local authorities have everything that they need to make the most of this agenda: buildings to convert, workforces to undertake the work and the capacity to borrow money to fund such works. This is a chance to create a new opportunity and make changes that benefit your areas and are self -funding. It is literally a ‘once in a lifetime’ opportunity.

In any major renewable energy project, the two major risks are obtaining planning permission and achieving a connection to the National Grid. Fortunately, a grid connection is not a problem with buildings; although planning permission is likely to be required.

Smaller PV schemes are also subject to the Microgeneration Certification Scheme (MCS), which is an internationally recognized quality assurance scheme that demonstrates to customers that companies engaged in PV installation work are committed to meeting rigorous and tested standards. Obviously for a local authority direct services team to undertake this work, it needs to become an MCS certificated installer and to use products also certificated under the MCS.

None of these hurdles should present a problem to a local authority team already undertaking substantial building maintenance work. It was mentioned above that there are significant benefits to any local authority that engages in renewable energy generation. These include:

  • Community leadership;
  • Energy security;
  • Carbon benefits;
  • Effectiveness and efficiency;
  • Economic benefits;
  • Income generation;

The best way of doing it is the ‘DIY option’ where the authority literally does it itself. This means it recruits and trains the people who will do the work, both preparatory and delivery; obtains the supplies and equipment itself, using its existing sustainable procurement processes; and gives active consideration to how the local economy can benefit at every stage.

But even so, the authority still wants to get the maximum value out of its project. To achieve this, it needs to create a revolving fund, where the original capital investment is recycled time after time to achieve maximum effect. Here is how such a project might be structured:

  • The Council starts the revolving fund by depositing an amount of capital into the new buildings PV account. It is up to the authority how much this is;
  • The Council would recruit a manual workforce and get it trained to the MCS Accreditation standards;
  • The Council needs to develop a schedule of its buildings and work plan;
  • Arrangements need to be put in place to procure the solar panel kits and other equipment necessary for the work to go ahead;
  • The work plan needs to determine the priority of buildings, although this is up to the authority;
  • As installations are completed and linked to the grid, the feed in tariff income would start to accrue to the Council’s PV account. The occupants of the buildings (whether the Council’s officers or members, schools or tenants) would get the electricity created by the PV panels free;
  • As some stage, the income coming into the revolving fund will be sufficient to continue to fund the operation of the team moving forwards; in other words, the operation becomes self sustainable;
  • Calculations need to be undertaken as to the value of the initial capital investment, as opposed to the size and speed at which the teams would exist and operate;
  • Once the operation becomes self sustainable, it can simply carry on until all the Council’s buildings have been fitted with solar PV installations and thereafter offer services to other public bodies and to the public at large. In this way work for a number of additional years may be obtained for the highly trained, skilled and experienced workforce that has been created;

It is mentioned above that this is a ‘once in a lifetime opportunity’. I have been involved in direct services for 25 years and, most of that time, those services have been under threat. It is a very long time indeed, since an opportunity to create some new ‘family silver’ has come along. An opportunity to enjoy growth as opposed to cuts; to create new skills, as opposed to a skills drain; to have a wider and wholly positive impact on other areas of the Council’s operation, rather than being just a recharged central cost. This proposal offers all of those things.

Stephen Cirell is a Consultant with the Association for Public Service Excellence


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