30/06/2015

By Pure Leapfrog

Open Letter to Community Energy Groups

Dear community energy group,

We are excited to announce that we are beginning work on the development of a licensed legal toolkit.

Many of you will be noting that it’s about time! I am writing to you to give some insight into why we are taking our particular approach and the lessons we have learned over the years from supporting the sector.

Setting the scene

Throughout Pure Leapfrog's history we have been dedicated to supporting community groups to deliver their projects and helping to get them over the line. Through our expertise & support programmes, the initial approach we took was to broker in through our network of pro-bono professional advisers high value professional support. To date we have brokered in over £2 million of pro-bono support. We didn't always get it right but along the way we and our network helped a number of the sectors leading community energy groups deliver their first project and to set some precedents. These include:

  • The lease and share prospectus agreements for the sectors first PV on social housing with Repowering to deliver Brixton Energy.
  • The legal agreements that underpinned Bath & West's schools programme as well as Community Energy Warwickshire's first solar project.

We recognised back then that one of the sector's biggest barriers was (and still is) access to affordable and reliable professional support.

False start?

Having supported close to 30 projects we thought the answer was to freeware the documents created to date and make them widely available. This way we could accelerate project delivery and remove one of the sector's biggest barriers. We worked with the Legal Sector Alliance to create Envirofile. It still exists and there is some valuable documentation there. However a number of issues soon surfaced.

  1. We were notified by a group that they had been passed on the template lease from another group and tried to execute it themselves. The legal cost to rectify the issues set them back thousands of unnecessary pounds and valuable time.
  2. The environmental space is one of the most fast paced areas of law and the contracts soon became out of date. However, updating them became logistically difficult. This was in no small part due to the fact that there was no income for the charity to maintain them. Relying on pro-bono support to update them proved ineffective.
  3. There were nuances to some types of documents which needed further support. When was it appropriate to use a lease, when a licence and when an entirely different type of agreement? Commercial vs local authority, there appeared to be specific clauses for each. This needed hands on support and we knew groups weren't getting appropriate legal advice, again wasting valuable time and money.
  4. Through our impact investment we were presented with legal agreements which were not ‘market’ and not bankable. Ultimately the documents did not provide adequate protection and the right clauses.

The list goes on. In early 2014 we decided to withdraw the template legal contracts from Envirofile as we realised a new approach was required.

Our solution?

An approach which still lowers the entry barrier, opens up the possibility of participation and creates a platform which is sustainable. It borrows a model from the commercial sector which has been around for decades and is proven and well established. By licencing the documents a few things are made possible.

Firstly, an income is generated which allows for the resources to be maintained. This resource can be built up over time to serve the needs of the sector and become an asset. The resource platform will stand the test of time and be one which can be relied upon week after week, month after month, year after year. These resources will be proven models, signed off by the preeminent leading firms in the sector so there is the comfort in knowing groups are getting the best available.

Secondly, controls in place will ensure mistakes aren't made that could harm investors including members of the general public.

Thirdly, legal contracts do not sit in isolation. Our intention is to wok across the various sectors and with the likes of CEE to ensure the documents developed are those that are not just fit for purpose but address the sectors biggest needs.

Finally, for the sector to grow and become something that government and the public take seriously, we cannot live off freebies and handouts. Putting something back into the pot will ensure future generations of community groups will have resources to get their projects off the ground.

The sector has been built to date by people who believe in a better and more sustainable future. We believe our long term view will provide the sector with a sustainable solution. We urge you to back our project and encourage others in the sector to do the same. We have kicked off the work with a survey, the results of which we will publish shortly. The resulting work will be converted in short order into the most urgent documents. It has taken us time to secure the funding to build the foundations and I hope you will join us in developing this resource together.

All the very best,

Alex

Interim CEO