Innovative financing models to achieve energy retrofits in social housing in Bristol
Testing innovative financing models to implement vital energy efficiency upgrades in community buildings
City Lab research led by: the City of Bristol and SPRU
Bristol is located in the south-west of England and has a population of 535,000 people, making it the largest city in the area.
The Bristol City Lab is looking to address the issue of poor energy efficiency in community buildings across the city. In the past, these buildings have often been left until last to receive vital energy efficiency upgrades which has the potential to have an impact on its users. The City Lab will look to explore how an alternative finance mechanism – investment based crowdfunding – could provide the desired capital to fund these projects whilst also delivering social benefits.
City Lab Description
Bristol City Council is exploring the feasibility of crowdfunding as a means of raising capital to install energy efficiency measures within community buildings.
Community organisations are often viewed as ‘riskier’ tenants when it comes to the repayment of debt (how the energy efficiency measures would be repaid), and traditional due diligence will often rule them out as ‘safe’ candidates. However, the energy efficiency of these buildings is key to the level of comfort that can be provided – i.e. ensuring they are warm and not draughty – and to the reduction of energy bills that need to be paid. If energy bills can be reduced, there is more revenue available to that organisation to undertake their core activities.
Bristol City Council is looking to operate a ‘spend to save’ model of installing energy efficiency measures. In simple terms, this means the occupier of the building repays the investment costs from the savings on their bills. Once this repayment term is complete, then the bill savings are theirs to keep.
Crowdfunding not only has the benefit of being able to raise capital in a different way, but it also is a method that attracts attention and requires the residents of Bristol to come together to raise the funds required. These are hyper-local investment projects, where the local community has the opportunity to promote their community centre being funded with the help of our partner community network.