Manchester councils mull creation of green special purpose vehicle
A group of councils is leading advanced talks to set up a special purpose vehicle to invest in solar photovoltaic panels in the north west.
The Association of Greater Manchester Authorities, which is made up of 10 councils, is developing a unique SPV model that would allow social landlords to install photovoltaic panels on their roofs without sacrificing profit from the government’s feed-in tariff. This is paid as an incentive to generate renewable electricity.
By becoming contractual partners of the SPV, landlords would be able to mitigate the risks of buying and maintaining PV panels, while capitalising on the FiT and reducing their tenants’ energy bills.
The model would allow landlords to put equity in the SPV or rent their roofs to it. Although it is still examining a range of ‘rent-a-roof’ offers from other companies, which will install PV for free in return for the feed-in tariff, installing its own PVs using the SPV is thought to be AGMA’s preferred route.
The proposed vehicle’s first phase would see six social landlords, including some from outside Manchester such as Wigan Lee Housing, install between 10,000 and 12,000 PV units.
If it is a success, AGMA would then look to bring in other landlords in the Great Manchester area that have expressed interest in partnering the SPV.
It is understood the group has been working with consultants Drivers Jonas Deloitte to develop the SPV model, for which prospective pension fund investors are being lined up.
To date, only green contractor Eaga, which was last month bought by Carillion, has managed to set up an SPV with institutional backing to invest in PV on social housing roofs.
AGMA and Manchester Council declined to comment on the plans for an SPV except to confirm that it was an option being considered. However, Sustainable Housing understands that, subject to approval from stakeholders, the vehicle could be announced in the next month and launched to begin installing PV this autumn.