Finances – different options for funding schemes

The costs of a scheme can be divided into four main areas:

  • Equipment. This will be for the renewable equipment itself – turbines, panels etc
  • Civil works. This includes any work on installing the equipment at the site.
  • Electrical system. This includes all the necessary electrical equipment – control systems, wiring, and transformer, but also connection to the electric. The cost of the latter is controlled by the local electric distribution company.
  • Other costs. These could include costs for design and project management, licenses, planning permission etc.

There will also potentially be running costs to consider. These can include:

Any rents payable on the land

  • Metering services used to measure the feed into the grid
  • Business rates as renewable energy schemes are classed as businesses unless they are part of a domestic property
  • Maintenance of the system
  • Insurance costs
  • Any public or employers liability

Raising the money for schemes can be done in several ways:

  • Grants, gifts and donations are all monies that are freely given by donors who support the purpose of the community and where there is no expectation of a return on the money.
  • Loans are monies that are invested by a third party and which must be repaid over an agreed length of time and with an agreed rate of interest.
  • Equity is an investment in return for shares and which give the shareholders legal rights, a dividend on their investment, and also a right to vote. There are three types of equity – withdrawable share capital, ordinary transferable shares and preference shares.

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