Engaging Energy

Feed-In Tariff Franchises

I like this one. Its got real possibilities.
The UK is going to bring in feed-in tariffs for some renewable energy sources. Not sure which. Not sure when. But it will happen. This opens some possibilities, like roof rental for solar. My idea is a bit more holistic.

If feed-in tariffs were enabled the possibility of local ‘Mom & Pop’ power companies is raised. This could placate much enmity within the planning process with operators being locally based and directly accountable to the communities that they live in (there has always been an issue with perception vs reality here but I won’t go into that).

To get a significant number of these ‘local’ power companies why not set up an off-the-shelf McPower franchising system.
The franchise would cover the technical feasibility, planning process and engineering set-up. Once commissioned the franchisee would be tied to the franchisor (possibly an existing network operator, possibly not) who would supply any specialist consultancy and engineering supplies required at +/- market rate.

The franchisee would be responsible for operation, care & maintenance of the installation. It would, for a large proportion of the set-up fee, take a cut of the energy supplied and a portion of the sale of any carbon credits generated. The option could be given that the franchisee can ‘save’ carbon credits for redemption in the future thus giving them the option to hedge their capital investment through exposure to the EU carbon market.
Capital investment for the project would initially be via a loan from either the franchisor or a commercial bank that has applicable skillsets (it would be an investment bank but I’m not sure that any of those still exist).

The reason for a network operator to engage in this kind of operation is
less on the ground staff, pensions, etc
a quick and guaranteed payback on capital investment (loan would be secured)
probably an increased chance of gaining planning permission for additional generating capacity covered under the RO
a tied-in supply of carbon credits (under supposed terms & conditions of franchise)

Reasons for planning authorities to buy-in
local operator on a scale that is accessible and accountable (to local govt and populous)
meets objectives on employment (many areas with potential for renewables are both under populated and under employed)
meets objectives on sustainable industry (with majority of supply chain easily seen it is easier to assess sustainability)

Reasons for a franchisee to buy the franchise
allows a small skilled/semi-skilled business to operate in an area that is remote (lifestyle)
ethical industry (lifestyle)
allows access to an area of industry that was not previously available (economic gap)
has back-up from the big boys (insurance)
can grow the business by adding more sites (possible for terms and conditions allow for good corporate citizenship proof by operation. This would qualify the franchisee to acquire more sites in the area as they gain a good reputation within the community. Cycle of benefit)

Possible problems
Still requires a well funded corporate or govt agency behind it to sustain the model (to facilitate loans and supply chain economies of scale that make the franchise model viable)
Franchisees may be seen as puppets rather than local operators

Ideal first targets large farmers and land owners with significant on-site energy needs (there is a possibility of linking in with subsidies for CAPEX on renewables for these to negate the need for development loans). It allows a risk reduction and diversification of income stream for these users.

There’s your business model, now away you go and make it happen