Power and Money: How local economies can benefit from renewable energy

February 16, 2011   By Luke Hildyard

Localism think tank, NLGN have called on councils to try and cushion some of the current financial pressures they face by making greater use of green energy subsidies – with an estimated pot available of up to £12 billion over the next two decades.

With some council budgets being cut by nearly 9% next year, a new report Power and Money highlights how some authorities are already starting to install solar panels on social housing and other council properties, thereby accessing new sources of funding through the ‘Feed-in Tariff’ and the ‘Renewable Heat Incentive’.

However, NLGN has also warned how a lack of clarity from the government on its support for schemes is hindering such development. With only 275 community properties among the 20,000 Feed-in tariff installations accredited last year, there is a danger that the vast potential for green energy solutions across the local government estate will be left largely unfulfilled.

Report author, Luke Hildyard said

“We estimate that the Feed-in Tariff and the Renewable Heat Incentive could represent an estimated £12 billion investment in renewable energy. Local authorities will be able to access what could be a potentially vital source of revenue at a time of unprecedented budget cuts.”

“But by carrying out the review of the Feed-in tariff earlier than planned and delaying the renewable heat incentive, the Government has increased the risk factor for those planning to roll-out micro-generation installations locally. Renewable energy projects require costly and time-consuming planning and research, which councils may be reluctant to undertake in an uncertain environment.”

While direct financial returns are one potential benefit for councils, the NLGN report also shows how green investment can soften the blow of public sector job losses by creating new eco-friendly jobs in the private sector.

Case study examples in the report include Kirklees Council, whose Leader, Cllr Mehboob Khan, said:

“We viewed the new incentives as an opportunity to develop the local green economy, support and create jobs as well as reduce carbon and tackle fuel poverty. The projects we are developing build on previous experience and are good news for our residents.”

February 16, 2011
Authored by

Luke Hildyard
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