NICE Ltd - a case study
NICE (Northern Ireland Community Energy)
Type of Business
Northern Ireland’s first community solar energy enterprise
About the share offer
The share offer was launched on March 3 at Stormont and is open for an initial period of four weeks. The aim is to raise £150,000 with a minimum investment of £250 in shares. The group estimates that return on investment will be in the region of 4% annually to shareholders. In addition, tax payers will be eligible for a one-off 50% tax relief on their investment.
The money raised from the share offer will allow NICE to put around 9 PV solar installations on community buildings such as community centres and charities.
The Opportunity
While it may surprise some people, the power of the sun in Northern Ireland can produce substantial amounts of electricity. Many of the directors in NICE come from an environmentally sustainable energy background and not only have an expert knowledge of renewable resources but also a passion and commitment to the environment.
They felt that developing a community solar project would allow them to create economies of scale, shared technical expertise, and to grow the knowledge base in Northern Ireland.
“Traditional energy companies aim to maximise profit that reaches a small number of individuals. Our community-owned co-operative is based on a decentralised and far more equitable model that helps the environment, helps the local community, and is built upon principles of fairness,” explained director Andrew McMurray, who was also behind the successful Drumlin Wind Energy cooperative.
The group put out a call for third sector groups (charities, community groups, churches and social enterprises) that wished to have a solar installation on their roof top. When the PV solar panels are installed on the roofs of these buildings, the third sector group will then receive the electricity that they generate at a substantially reduced rate of 5.5 kw – saving them money every year. Any excess energy produced will be sold on to Northern Ireland Electricity. These profits will be used to produce a return to investors and partly placed in a Community Fund for future green projects to tackle fuel poverty.
Why Community Shares?
NICE is run by members of the local community – all volunteers – for the local community. The infrastructure they will help develop will not only aid future generations, but will also bring immediate and tangible benefits.
“The whole concept of this project is about sharing. Community Groups are sharing their roofs for us to put up panels, we are sharing a lower cost of electricity with them as well as sharing the proceeds with investors from the community. This is about fairness, equity, equality and sharing,” said NICE director Douglas McIldoon, former NI Energy Regulator.
A Community Share offer was the obvious choice because it prioritises local investors from the very community that will benefit from the solar project. It also is a fair and equitable way to run a business as each investor gets one vote, giving them a voice in how the project is run.
The process
NICE was supported by the Community Shares Ready project, run by Co-Operative Alternatives to assist them with developing the society, defining the legalities and writing the share offer.
“The team at Co-Operative Alternatives gave us the assistance we needed at the time we needed it. They provided so much support and have gone far beyond the call of duty. They also have excellent contacts which have been really useful to help us progress to the share offer,” said director Cye Bannon.
Challenges
All of the volunteer directors have other commitments so time has been a big issue.
“The process has been rigorous – and this is completely right. If you are putting together a share offer and asking people to invest, everything has to be in order. A community owned solar energy company is a new concept to Northern Ireland and we have spent time ensuring we adhere to all planning legislation and other legalities,” said director Karen Arbuckle.
Advantages
NICE managed to install its first solar panels on the roof of Mediation NI in University Street in Belfast. The south facing roof was ideal for a small installation and is already in place and generating energy for the company. This first installation demonstrates the directors’ commitment and confidence in the project as a whole. It also gave them vital feedback from the business.
Rob Colwell, office and finance manager of Mediation NI, said: “We were amazed at how straightforward and quick this has been. We discussed it with our board and two months later the panels were in place on the roof generating low cost electricity for us. The legalities and the process were clearly explained. The contract was easy to understand, we reviewed and were very happy with the terms. We estimate that we will reduce our energy costs by 50% each year. This is a win-win situation – as an organisation we support green ideals and we are always trying to reduce our carbon footprint and save money. In addition, we liked that NICE is a cooperative – we support the ideal of working in collaboration with other organisations and also helping the community.”
Advice
NICE benefited from development support and expert advice with the Community Shares, Ready! project. We helped NICE to strengthen their Board and established good governance practices, to register as a community benefit society and adopt a suitable governing document. We wrote and published their community share offer and helped them with the launch. We were also able to engage professional advice such as a barrister and a solicitor to assist NICE to develop the right proposal for the potential sites.
