Developing Viable Self-Sustaining Community-Owned Solar V Projects in the UK through Business Model Innovation

The UK’s energy system is predominantly centralised with a significant reliance on fossil fuels. The trilemma of successfully delivering energy security, equity, and environmental sustainability while dealing with an ageing energy infrastructure demands evolutionary changes within the entire energy system. In recent years the future of the UK’s energy system has attracted growing involvement by local and community-based projects for energy generation, these involvements have begun to play an increasing role in the evolution of the UK’s energy system. However, the development of these projects faces huge financial challenge due to a lack of consistent income stream and a viable business model.
The primary aim of this research is to evaluate ways to accelerate the formation and growth of Community Renewable Energy (CRE) initiatives in the UK by optimising existing community renewable energy model and developing an innovative business model that community-owned solar PV projects can take to progress under the post-subsidy conditions.
This project employed the mixed method approach including primary data collection (survey, semi-structured interviews), and the secondary data collection (desk-based literature review and reviewing Government and official reports) also, it uses the System Advisory Model as a simulation tool and business model Canvas as an analytical framework to address its aim and objectives.
This research has shown that UK’s community-based energy sector has evolved rapidly since 2008 and has seen considerable growth in 2014. The business models used by community energy projects mostly depend on grants and public subsidies. Therefore, these projects have faced substantial financial challenges since January 2016 with the reduction in public subsidies for renewable energy (e.g. Feed-In-Tariff). The Feed-In-Tariff (FIT) scheme was introduced in the UK on 1st April 2010, with the aim of supporting small-scale (<5MW) renewable electricity generation. This study has shown these reductions caused the failure of many community-based renewable energy projects particularly solar PV projects.
This study critically investigated how the new CRE projects can be structured and developed to be financially viable when the FIT scheme is no longer available. Also, it further explores how the integration of solar PV and electricity storage can be structured to provide demand-side response services as well as, be a feasible and financially viable model for distributed energy system and community-owned solar PV projects in the post-subsidy condition.
The outcomes of this research is a developed and robust innovative business model to support the development of community-owned solar projects in the UK. Under the innovative model, these projects could become financially viable without the FIT, which the model can be extended to all community-owned solar projects in all localities.