Schools are at the heart of our local communities and represent a quarter of public sector carbon emissions. While around 80% of local authorities have declared a climate emergency, many do not have plans in place to tackle schools’ emissions.

Subsidies and grant funding have been a central part to any action taken so far. The Public Sector Decarbonisation Scheme (PSDS) in particular has been used to support schools, but that can be difficult to access especially for the growing number of academy trusts.

For local areas to decarbonise at scale, we need to think differently about how we fund and how we deliver net zero – especially for those organisations that are so stretched, that they have limits on the time and money they can invest.

The Innovation

Green Fox Community Energy Co-operative, working in partnership with Energy Systems Catapult, Loughborough University and Leicester City Council, set out to tackle the problem of how schools can deliver net zero. The project was funded by Power to Change, as part of a wider programme for community organisations to develop and test new business models.

The innovation is to remove finance and complexity as a barrier for schools to decarbonise. Through the creation of a Community Energy Service Company, or Community ESCo, Green Fox would manage the risk and complexity on behalf of the school – becoming responsible for raising the finance, finding the right low carbon solutions, and managing bills and energy savings.

The Challenge

Energy Systems Catapult was given the challenge of helping Green Fox with the design of the business model, understanding the capability required, and the risks and barriers that need to be overcome.

The Solution

The net zero schools model is a two-stage approach:

1. Base Model measures the schools’ energy consumption and costs, then implements energy efficiency and proven low-carbon technologies to reduce these, including generation through solar PV.
2. Base Model Plus achieves full electrification of the energy demand, which totally decarbonises the schools by adding heat pump technology and newer products and emerging markets for additional value. The Community ESCo is responsible for all aspects of delivery including identifying the right measures, raising finance, installation and managing energy bills.

The Impact

The project teamed up with four Attenborough Learning Trust (ALT) schools in Leicester to develop both stages of the business model using real-time data. The analysis showed the Base Model would enable:

• 42% savings on the trust’s energy bill;
• a six year payback on initial combined capital costs;
• 21% carbon reductions by installing energy efficiency measures and solar PV;
• 16% further emissions reduction by switching to a renewable energy tariff.

The capital cost to implement the Base Model was approximately £54,000 per school. Scaling up to all 80 primary schools in Leicester would cost £4.3 million.

The Base Model Plus could cover over 50% of the costs for creating a net zero school, with grants such as the PSDS available to help meet further funding requirements. For schools with better insulation standards, the Base Model Plus may be viable without any public funding.

Based on the project’s modelling, the Base Model Plus would enable:

• 63% further emissions reduction across the schools, leading to full decarbonisation;
• a 20% increase in self-consumption of electricity by installing solar PV, which in turn helps the model’s overall finances (including reducing heat pump running costs);
• potential savings of £2,000 per year by exporting renewable electricity back to the grid.

With energy prices continuing to rise in 2022, the commercial viability of each model has improved.

Next Steps

• The results of the modelling with ALT’s schools are available in this report. Delivering Zero-Carbon Schools: A practical and innovative business model for the community energy sector.
• Green Fox Community Energy is exploring demonstration projects with Leicester City and Leicestershire County Council.
• Some barriers still need addressing and need greater collaboration across government departments, local authorities and community energy groups.
• Energy Systems Catapult is looking to support other local authorities and community energy groups exploring new business models that can help deliver local climate strategies.