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Investing in solar power projects: a bright future for sustainable returns

Solar panels city
Solar panels city

Author: Ugo Ikokwu, grants manager

This year we provided a social investment loan to one of our existing funded partners, Repowering London. Here grants manager Ugo Ikokwu, explains how investing in energy projects can benefit low-income communities, and how social investment can compliment grant-making.

As the world faces the challenges of climate change and seeks sustainable solutions, social investment in renewable energy projects has emerged as a powerful force for positive change. Combining financial gains with social and environmental benefits, these investments offer a unique opportunity to address pressing global issues while generating meaningful returns.

Crucially for us, one of the primary goals of social investment in renewable energy is to empower local communities. By involving community stakeholders in the decision-making process and ensuring equitable access to the benefits, these projects can foster a sense of ownership and pride among local residents.

Repowering London

We’ve taken our first steps into this area, by investing into community-led initiative Repowering London. Repowering London’s focus is on community energy projects, particularly the repowering of existing renewable energy assets, such as wind turbines and solar installations. The organisation aims to empower local communities to take ownership of their energy production, promoting renewable energy, and fostering a more sustainable and resilient future for London.

Repowering London works in collaboration with local residents, community groups, and businesses to develop and finance renewable energy projects. These projects aim to engage people in the energy transition, create local job opportunities and reinvest profits back into community initiatives.

Valuable learning

Our investment into Repowering London has provided many valuable lessons and given us the opportunity to see first-hand its impact on communities and the planet, and why this type of investment is a compelling choice for socially conscious investors.

A few of the lessons include:

  1. The importance of conducting thorough due diligence on the technical, financial, and regulatory aspects of a project.
  2. Understanding the local energy landscape, government policies and potential challenges which can help mitigate risks and ensure the project's success.
  3. Aligning with experienced partners and ensuring transparent communication can contribute to a more effective ad impactful investment.

We know from experience that success in social investment relies on strong partnerships among investors, project developers, local government and community organisations. Partnership was a key aspect of this investment, and we saw us join forces with fellow funder Esmèe Fairbairn. Through our collaborative efforts we were able to foster transparency, accountability and an integrated approach to addressing what is a complex challenge. By sharing resources and information, we were able to simplify the due diligence process and reduce unnecessary paperwork for the investee.

Harmonising grant-making and social investment

The beauty of this investment is that it also enabled us to demonstrate the case for building and developing socially investable projects using grant funding. As an organisation, Repowering London is not new to Trust for London or our co-investor Esmèe Fairbairn. Through our grant funding, we’ve funded Repowering London to build a stronger network of organisations to alleviate fuel poverty in Lambeth and London. Using this funding, the project is empowering residents as agents of social change through training, volunteering, employment, mentoring and advocacy efforts to tackle the causes and effects of fuel poverty at local, regional and national levels. The support from the grant and the relationship we built meant that we were able to reduce the time and the process it would typically take to make an investment of this type, especially where you have two investors with different considerations (financial, legal and social).

I really enjoyed this investment opportunity, and I can say that the social investment movement is part of a much bigger social and environmental movement, of which we all need to be a part, and it’s very exciting.

Case study

An advanced innovation project from Repowering London is CommUNITY. This partnership with EDF Energy and UCL Energy Institute has delivered the UK’s first urban local energy project. The project piloted a peer-to-peer electricity trading platform enabled by blockchain technology and offered residents of Brixton’s Loughborough Estate savings on their electricity costs. The work has built on an initial solar panel installation on the roof of Elmore House, which powered its communal areas.

Through CommUNITY, residents were able to access electricity from the panels and share or sell energy to other residents. In December 2020, a communal battery was installed. This allowed residents to use stored solar energy in the evenings. In 2021, residents were also able to participate in an Urban Energy Club to test how they could support the local electricity grid by offering flexible power services to UK Power Networks from the communal battery.

Repowering London