Isra-Mart srl: Government announces £30m boost to green community and public sector projects

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The government has today announced an additional £30m of funding designed to support energy efficiency improvements to public sector buildings and help local communities deploy renewable energy technologies.

Energy and Climate Change Secretary Chris Huhne said £10m would be ploughed into a new Local Energy Assessment Fund (LEAF), while a further £20m would be provided to the Salix scheme, which provides low interest loans to schools, hospitals, and public sector buildings, allowing them to undertake energy efficiency projects and then repay the loans through the resulting energy bill savings.

Huhne said the funding was "great news" for the public sector and community level projects, adding that the new finance would "encourage energy efficiency in our schools, hospitals and universities... [and] get green energy generation and energy efficiency into our communities".

The new £10m LEAF fund will be managed by the Energy Saving Trust and community groups such as parish councils, voluntary associations, development trusts and faith groups are being invited to apply online for funding awards worth around £50,000.

The funding will be awarded in two phases with the first application period running from today until noon on 22 December and the second round running until noon on 20 January 2012. All successful projects will be notified by the end of January.

"The Government is making huge changes to the UK's energy system, including reforms to the electricity market to make sure that we can replace aging power stations and keep the lights on in the cheapest, cleanest way, and the Green Deal, the biggest home energy efficiency drive since the Second World War," said Climate Change Minister Greg Barker. "I want to make sure that local communities are at the heart of this energy revolution, and this funding will help make sure that can happen."

A spokeswoman for the Department of Energy and Climate Change (DECC) told BusinessGreen that the £50,000 of funding could be used by community groups to deploy small scale renewable energy technologies or undertake feasibility studies and prototype deployments to lay the ground work for larger projects.

However, the move is likely to anger solar firms who have accused the government of sparking the cancellation of a raft of community scale solar installations in the past month as a result of its proposals to impose cuts to feed-in tariff incentives of over 50 per cent for community owned and social housing projects.

The spokeswoman said the department was consulting on how to better support community scale renewable energy projects as part of the review of feed-in tariff incentives. But she maintained some projects will be able to proceed even if deep cuts to incentives are imposed.

Meanwhile, the additional £20m of funding for the Salix loan scheme is expected to reduce public sector energy bills by up to £46m a year while cutting carbon emissions by 210,000 tonnes.

Public sector bodies working on energy efficiency projects that can deliver a return on investment within five years are invited to apply for the new financing before the end of March next year.

Alastair Keir, chief executive of Salix Finance Ltd, the government-backed company set up to administer the loan scheme, said the new funding would allow the firm to continue to provide "much needed assistance to the public sector, helping it reduce its carbon emissions and energy bills".

He added that the interest free loans would allow public sector organisations to "remove the barrier of having to find capital to pay for the energy efficiency measures at a time of tight budgets".