Rising charity energy costs ‘locked in’ for rest of the decade
New SIB research, published today in Politico, reveals that charities face increasing pressure from energy bills, without any sign of relief this decade.
Forecasts from Cornwall Insight, central to today’s release, reveal charities and small business electricity costs have surged 12% in just four months, with community spaces among the hardest hit. The sharp increase follows the start of US military attacks on Iran and worryingly, the forecasts suggest prices will not return to pre-war levels for the rest of this decade.
Community organisations are often the backbone of local infrastructure, running food banks, youth programmes, and warm spaces, for example. But new data from Warm Welcome, included in today’s release, shows that more than one in five community spaces are already struggling to pay their energy bills.
At the same time, demand for their services continues to grow, as the cost-of-living crisis persists. Rising operational costs are therefore having a direct impact on frontline delivery.
David Barclay, Campaign Director at Warm Welcome Campaign said: “Warm spaces are not a nice extra, they are where people go when they are lonely, cold or in a crisis. Over 14.4 million people live in poverty in the UK and 7% of people experience chronic loneliness. As energy bills continue to rise, the window for intervention is narrowing. Without action, we risk losing the services and spaces communities depend on, and which cannot easily be rebuilt.”
One of the most concerning findings is the widening gap in energy efficiency. While commercial properties like offices and retail spaces have made significant strides in improving efficiency, community buildings are being left behind.
New research from Social Investment Business (SIB), also published as part of today’s release, has found that energy efficiency improvements in offices and shops are progressing at twice the rate of those in community buildings.
Poorly insulated, heat-leaking buildings are far more exposed to price volatility. Without investment, charities remain locked into higher costs and any future shocks.
Jacob Briggs, Energy Users Lead at Cornwall Insight, says: “The burden is falling on some of the most resource constrained organisations in the country and, without intervention, charities and community groups could face years of sustained high electricity costs… Expanding access to [clean energy] technologies would not only improve energy resilience and cut costs but will help safeguard the vital community spaces that so many rely on.”
Window of opportunity
Despite these challenges, there is a strong opportunity to act. Alongside Social Investment Business’ Energy Resilience Fund, providing grant and loan for energy efficiency including solar PV, batteries and more, the government’s Warm Homes Plan could rapidly expand the benefits of clean power to the sector. Within the Plan is £3.3 billion of unallocated funding, known as the Warm Homes Fund, which has the potential to help community buildings reduce their energy costs and improve resilience for the long-term.
Genevieve Maitland Hudson, Deputy CEO at Social Investment Business, says: “The government’s Warm Homes Plan could revolutionise community spaces, bringing down bills for the buildings at the heart of our most deprived communities, but only if the Plan brings targeted support”
There is already clear evidence that this works. Investment in technologies such as solar can dramatically reduce bills, in some cases. Initial analysis from Cornwall Insight, commissioned by Social Investment Business, suggests that solar panels could provide a £7,000 annual saving to charities, which could be expanded further with optimised battery storage.
Examples from charities that have taken advantage of SIB’s Energy Resilience Fund (ERF) demonstrate the potential benefits of action.
Higher Folds Community Centre and Nursery in Leigh, Greater Manchester, saw its projected annual energy bill jump from £12,000 to around £40,000 in just a few years, a jump that would have put them out of business, said Centre Manager David Rainford. After applying for ERF funding to invest in solar panels, lighting upgrades and efficiency measures, they are now saving over £1,000 a month.
Nottingham Mencap, a charity working with young people with learning disabilities, reduced their energy bills by more than 80% following a combination of renewable energy installations and building improvements, supported through SIB’s ERF fund, while also creating a more welcoming space for the people it supports.
The current moment presents a window of opportunity. With the right investment, thousands of community spaces can be futureproofed, reducing bills, increasing energy security and releasing vital funding back into the services millions rely on. Without action, we risk losing them.