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Community Biomass Guide - Funding

When putting together initial plans for your project, it is worth investigating what funding may be available.

As a general rule, for community renewable heat projects, accessing funding such as bank loans before planning permission is granted, is probably not an option, but there are grants and loans available, to help get community projects to this stage. 

Funding schemes including grants and loans will have specific requirements that must be met for your project to qualify. Investigating funding options in the early stages of your planning will ensure you can maximise your funding opportunities. Avoid missing any important application deadlines, where they exist, and ensure where possible your group’s legal structure and governance, operations and project design can meet relevant funding requirements.

Most funders will expect you to have a good, basic understanding of what your project entails. Having a rough breakdown of costs with a description of how you propose to spend the funds in question will help. Funders may also expect you to clearly articulate the benefits for the community and likely wider outcomes of your project. Having this information available will also help you work out which of the funds from the list below are likely to be of use.

Funding sources are grouped as:

The sources below generally provide funding for projects, to help get them started or, for example, to buy equipment or support community engagement activities.

If you are planning a small project that requires limited capital or seed-funding to get started, you may find that a local campaign for donations is an option. Larger projects are likely to benefit from grant or loan funding, particularly when equipment is required. A bank loan and/or community share offer will most likely be needed to help a large scale community energy project go through to implementation. Other grant funds may help with the costs of group set up, feasibility and planning stages of your project (e.g. Rural and Urban Community Energy Funds).

• eligibility criteria: to see whether you are likely to be suitable for a particular fund and to investigate whether the fund can be used alongside other funding sources.

• application deadlines: some funds will have a rolling application, others will have set dates – make sure you put dates in your diary so you don’t miss any deadlines.

• what’s involved in application forms: some applications may require just organisation and project information; others may require more specific and detailed information such as evidence of community engagement, certificates, receipts, metering, business plans etc. Make sure you know what is required so you can plan how much time, what skills and information will be required to complete the application.

• how grants and donations can help with initial and detailed feasibility studies: beware that if you don’t get planning permission you may lose the money you have invested so far so you want to avoid repayable loans for this work.

• that banks and other funders are unlikely to fund 100% of your project costs:  you may need to secure a number of funding sources (match funding).

• being clear about the community benefits of your project and integrate them into your business planning: your project needs to be considered of interest and value by third party, potential funders, not just by you.

• keep an eye on changing funds: funds can change from time to time so keep an eye on funds of interest to avoid disappointment.

Funding for community groups

Area of Outstanding Natural Beauty (AONB) – Sustainable Development

Funds (SDF)

Fund administrator: AONB’s

Fund type: Grant

Description: Funding available to projects that will enhance or benefit the AONB area in question. Varies between AONBs.

Information on, and weblinks to, Britain’s 46 AONBs.

Big Lottery Fund

Fund administrator: Big Lottery Fund

Fund type: Grants

Description: Range of grant funds providing between £300 - £500K+.  Funds community groups and projects that improve health, education and the environment.


Crowd funding

Fund administrator: Various

Fund type: Donation or investment

Description: A project idea is presented on the internet via a crowd funding website. People who like the project can register donations. Enables community projects to access donations or establish community shares offering.

Microgenius - community shares platform

Company Corporate Social Responsibility (CSR) funds

Fund administrator: Various

Fund type: Usually grants or loans

Description: Some companies offer funding for community projects as part of their Corporate social responsibility (CSR) programme. It is worth looking into local, smaller businesses who may be interested in investing in a local project and/or a sponsorship opportunity. 

Local authority funding

Fund administrator: Local authorities

Fund type: Usually grants and loans

Description: Funding may be available from your local authority through section 106 (, the community infrastructure levy and ‘allowable solutions’ contributions. Contact your local planning authority for details of availability.

Find your local council

Landfill Communities Fund

Fund administrator: Entrust

Fund type: Grants

Description: Funding available to projects within 10 miles of a landfill site that create significant environmental benefits, jobs and which improve the lives of communities living near landfill sites. Projects must comply with the objectives of the Landfill Tax Regulations 1996.


National Park – sustainable development fund

Fund administrator: National Parks

Fund type: Grant

Description: Funding available to projects in Wales and England’s National Parks that demonstrate show some of the following:

• Environmental, social and economic sustainability
• Conservation and understanding of the National Park
• Explore 'models' or 'best practice' for sustainable living through innovative ideas
• Create new partnerships that have no access to alternative public funding
• Support or involvement of local communities
• Involve action by young people
• Encourage links with urban groups and visitors


Social Investment Tax Relief (SITR)

All community energy generation by qualifying organisations will be eligible for SITR with effect from the date of expansion of SITR, at which point it will cease to be eligible for the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trust Scheme (VCTS).

Funding for Woodland management

Woodland Capital Grants 2015 and Countryside Stewardship

Grants to encourage woodland management were administered by the Forestry Commission in England and Scotland, and in Wales by Natural Resources Wales.

Grants are changing. For further details:


Grants may support:

Production of Woodland Management Plans to help woodland owners assess:

  • both the trees and the wider environment within their woods
  • management options
  • what wood could be sustainably harvested

Woodland Management Plans are reviewed against the UK Forestry Standard to ensure sustainability and will normally be approved with a felling licence

Improving woodland condition

  • addressing threats such as invasive species
  • improving management access to help you harvest wood sustainably

Support for planting a new wood.

While less likely to supply woodfuel for several years new woods can deliver a whole range of other benefits to communities.

In England and Scotland Forestry Commission Woodland Officers and in Wales Natural Resources Wales Foresters will provide expert advice on your proposals.

Funding for woodfuel production and supply

Rural Development Programme for England (RDPE) – new funding round under consultation

Fund administrator: Defra

Fund type: Grant

Description:  The Rural Development Programme for England (RDPE) provides funding for projects that improve agriculture, the environment and rural life.  You won’t be able to apply for funding until 2015 as the RDPE is being revised. The new scheme will support three areas:

• managing the environment
• increasing farming and forestry productivity
• growing the rural economy


The RDPE includes several grant streams. Leader is most suited to community projects.

The Prince’s Countryside Fund

Fund administrator: The Prince’s Countryside Fund

Fund type: Grant

Description:  The fund gives grants to projects that help support the countryside. Grants of up to £50,000 are available to projects that tackle one of five key issues:

• improving service provision in rural areas
• supporting rural enterprise
• supporting farming businesses
• providing training opportunities for young people
• educating people about the value of the countryside


Funding for community energy


Fund administrator:  Various

Fund type: Loan and grants

Description: Finance available for energy projects that can demonstrate a return on investment. Seed-fund in the form of grants is available from some banks to help with project planning and feasibility. They are unlikely to give you 100% of your project costs so match funding will be required.

Community and Renewable Energy Scheme (CARES)

Fund administrator:  Local energy Scotland

Fund type: Grants and loans

Description: Established by the Scottish Government to encourage local and community ownership of renewable energy across Scotland. Support available includes start up grants for community groups (up to £10K), community buildings grants, pre-planning (up to £150K) and post-planning loans and an infrastructure and innovation fund.


Charitable grants

Fund administrator:  Various

Fund type: Grants

Description: A large number of charitable grants are available, however funders often have quite specific objectives. Contact the fund administrator before submitting an application to make sure your project or group is eligible.


Trustfunding - annual fee is needed
Cafonline - Charities Aid Foundation

Community Share Offers

Fund administrator:  Various

Fund type: Community Shares

Description: Projects can raise significant funds through a community share offer. Community shares enable investment to come from community investors. There are some restrictions on the types of organization that can issue a community share offer. Guidance and advice on eligibility and community share offers themselves is available from The Community Shares Unit.


Green Deal (domestic and non-domestic)

Fund administrator:  Various

Fund type: Loan

Description: The Green Deal provides upfront investment to fund the retrofitting of existing buildings to make them more energy efficient and renewable energy technologies such as biomass boilers and wood stoves. It allows energy companies and accredited Green Deal providers to finance and install a range of energy saving measures and renewable technologies, the costs of which are then repaid back to them through instalments on the energy bill from the property that has benefitted from the investment. Green Deal finance can be used to fund both domestic and non-domestic building energy efficiency improvements.


Planning Aid England

Fund administrator:  Planning Aid England

Fund type:  Pro bono advice

Description: Provides free, independent, professional advice on planning issues.


Planning Aid Wales

Fund administrator: Planning Aid Wales

Fund type: Pro bono advice

Description: Provides free, independent, professional advice on planning issues.


Renewable Heat Incentive (RHI) domestic and non-domestic

Fund administrator: Ofgem

Fund type: Tariff

Description:  RHI is a financial mechanism in the form of payments for the generation of renewable heat. The incentive has two schemes, the domestic RHI and the non-domestic RHI. The schemes have separate tariffs, joining conditions, rules and application processes. Your system and installer will need to be Microgeneration Certification Scheme (MCS) accredited.  Domestic RHI scheme payments are based on the technology installed and your estimated annual heat load figure (in kWh’s) taken from the Energy Performance Certificate (EPC) for the property in question. The non-domestic RHI scheme payments are based on technology installed and metered heat generation on a p/kWh basis with payments being made to heat generators over a fixed period . Community biomass projects supplying more than one property will be eligible for the non-domestic RHI.

Domestic scheme
Non-domestic scheme

Rural Community Energy Fund (RCEF) in England

Fund administrator: WRAP

Fund type: Grant and loan

Description: The Rural Community Energy Fund (RCEF) is a £15 million programme, jointly run by the Department for Environment, Food and Rural Affairs (Defra) and the Department of Energy & Climate Change (DECC). It supports rural communities in England in the development stage of renewable energy projects that provide economic and social benefits to the community. Stage 1 provides a grant of up to approximately £20,000 to pay for an initial investigation into the feasibility of a renewable energy project. Stage 2 provides an unsecured loan of up to approximately £130,000 to support planning applications and develop a robust business case to attract further investment.


Urban Community Energy Fund (UCEF) in England

Fund administrator:  Centre for Sustainable Energy/Pure Leapfrog

Fund type: Grant and loan

Description: The Urban Community Energy Fund (UCEF) is a £10 million fund managed by the Department of Energy and Climate Change (DECC) to enable communities in those areas of England not covered by RCEF (see details above) to access funding to carry out feasibility studies for renewable energy projects, fund pre-planning studies and prepare planning applications.


Venture Philanthropy

Fund administrator: Various

Fund type: Various forms of financial support

Description: A cross between a charity and a bank, philanthropists help develop projects and plans by offering financial support to charities, social enterprises and community groups when they may be unable to access grants or other more traditional forms of funding. The Charities Aid Foundation run Venturesome, offering support of between £25,000 and £250,000 to help with specific challenges.


Ynni’r Fro community programme

Fund administrator: Energy Saving Trust

Fund type: Grant, loan and practical support

Description: The programme offers both preparatory stage and capital grants for community scale renewable energy projects in Wales. Preparatory stage grants of up to £30,000 are available to fund early stage activities to get projects off the ground, and capital grants or loans of up to £300,000 are available towards the capital costs of projects. Funds are available for legally constituted community based social enterprises located in Wales.


Other sites with funding information

Council for Voluntary Service (CVS) – for local opportunities 
Charities Aid Foundation – list of funds 
Directory of Social Change
Energy Saving Trust – finding Funding
DECC - Community Energy
PlanLoCaL – funding and finances 



Last updated: 29th August 2016
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This web section is provided in partnership with DECC.

Community experiences

How a Leicestershire college school used innovative partnership and funding approaches to get sustainable, cheaper heat.