1.1 Introductory case
Low Carbon Hub: a collaborative business model
 | Low Carbon Hub (LCH) is a social enterprise based in Oxfordshire. They develop and deploy community-owned renewable energy installations across the county, on school and business rooftops. Working with a producer of medical devices, Owen Mumford, they were able to install large solar panel arrays on four of their buildings in rural Oxfordshire. |
Because the finance for the panels is raised using a community-based investment model, the panels were installed at zero cost to the business. Owen Mumford benefit from a considerable saving on the cost of electricity, and anything they don’t use is then exported to the grid, to be used elsewhere. This contributes to the growing share of UK energy supplied from renewable sources. Since LCH is a social enterprise, all funds that are generated from exporting the energy can be reinvested into other similar projects.
This not only benefits Owen Mumford with lower electricity costs and reduced carbon emissions, but the nature of the Low Carbon Hub business model means that the collaboration with Owen Mumford will also be supporting the roll-out of community renewable energy to schools, church halls and community centres across Oxfordshire.
Thinking point
Low Carbon Hub (LCH) is a real pioneer for community energy in the United Kingdom. Renewables initiatives like this are often run by publicly funded local authorities, but LCH have raised investment from the local community to install solar panels on the rooftops of small businesses throughout Oxfordshire. Although LCH currently benefits from government subsidies for the power that is generated, they anticipate that as the cost of projects falls, they will be able to continue to operate even if subsidies are removed.
The collaboration with Owen Mumford also illustrates something of an ‘ideal situation’, where businesses can benefit financially from low carbon investments without incurring any direct costs. Do you think that this model, which takes away the need for capital investment by the business, could encourage more SMEs to engage?
1 The business challenge