The Co-op’s business model is simple and is modular. It provides free solar panels and reduced-price electricity to schools, where a combination of the sale of electricity to a school and the feed-in tariff income or grant (if available) should be sufficient in a typical year to enable the Co-op to meet all its costs, pay interest at the projected rate of 4.5%, repay members their investment over time and have a margin for unforeseen expenses, which, if not required, will form part of the Co-op’s surplus which is principally paid to the schools it works with. It is a straightforward business for the Co-op to add additional sites.
Sale of electricity
The Co-op’s income will come from the sale of electricity and the feed-in tariff (which is increased on 1st April each year in line with inflation). Electricity generated will be sold to the schools or, to the extent they do not use it all and it is cost effective and feasible to do so, to an energy supply company (currently Co-operative Energy) through an export arrangement. The Co-op’s solar arrays of 30kW or less currently benefit from the “deemed export” arrangements of the feed-in tariff, where it is deemed that they export half their generation regardless of the actual amount exported.
To date the Co-op has carried out installations on over 60 sites with it owning and operating nearly 2,500kWp of solar panels generating electricity from the sun.
Development of new school sites
The Co-op meets the development costs of new projects and capitalises them if they become commissioned. The costs of unsuccessful projects are written off. These costs are modest, however, because Energy4All, the Co-op’s manager, meets the salary costs of the Co-op’s project manager, Laura Moreno. The Co-op’s principal contractors, Joju Solar, operate on an at-risk basis and the Co-op’s directors are volunteers (except for Laura). The Co-op also received a grant from the Greater London Authority in 2018-9 towards the preliminary development cost, and the cost of any projects that do not proceed, of its projects in London. The Co-op has applied for a further grant from the Greater London Authority to support these costs of its work in London in 2019-20.
Financial projections are by their nature uncertain and are inherently less reliable over longer time spans. For a project such as this, revenues will be particularly dependent on weather and the performance of the solar panels. Financial returns to members are not guaranteed.