Case Studies

Social entrepreneurs behind the enterprises: Jon Cape, Power Circle

In recognition of receiving an award from the Catalyst Fund, we caught up with Power Circle‘s Managing Director Jon Cape to discuss his social entrepreneur journey and to learn more about Power Circle’s mission to democratise and decentralise our energy supply.

Hello Jon, thank you for speaking to us about Power Circle and your journey with Firstport. To get started would you tell us a little bit more about Power Circle, how it started and what were the initial challenges that you faced.

Jon – Good, so Power Circle grew out of a social enterprise I started with colleagues back in 2011 called iPower. The ‘i’ stood for inclusion amongst innovation and integration. We worked on a wide range of low carbon projects, of varying types and on different buildings, during these projects we found that people’s understanding and knowledge of the industry to be a major barrier. They were hesitant about up front costs, the industry was too strange and risky and not enough knowledge about the technology. To confirm this we implemented pilot projects, during which we were able to confirm that the idea low carbon energy becoming mainstream, was a very reasonable and understandable barrier for us. We have designed Power Circle to address each one of those barriers, so we can scale up low carbon in a way that is inclusive. We have had help from various agencies in doing that, which has allowed us to turn the iPower team into the core of the new Power Circle entity.

The barriers that we faced as a social enterprise, like any other was starting from scratch, even though we had a predecessor, we had to earn our spurs and create our own reference site, case studies and generating positive testimonials. Our first year was very much doing that. We were doing things where we received a relatively low cash income from the amount of work we were doing, but we were getting positive testimonials out of it. We’re now into our second phase where we can afford to charge more for what we’re doing, which is good. We’re now being opened up to public sector bodies and charities, getting into the appropriate procurement channels, that means they can now actually start working with us. We were delighted in December 2021 we were selected for the Housing and Social Housing emerging disruptors framework. That means that any public body or charity in the UK can contract with us without any further procurement. This has helped us address a major challenge that up until then we had been facing.

“The barriers that we faced as a social enterprise, like any other was starting from scratch, even though we had a predecessor, we had to earn our spurs and create our own reference site, case studies and generating positive testimonials.”

Jon Cape, Managing Director at Power Circle

That sort of answered part of my next question, how did Power Circle meet those challenges?

Jon – Yeah, we met them with blood, sweat and tears. Doing things at a low margin, getting the track record established and filling out about 15 documents to get onto a framework.

So, why did you want to turn Power Circle into a social enterprise?

Jon – I believe, and the rest of the team believe in social enterprise values. Really, we’re not here to maximise profit for ourselves. As you know, we obviously want recompense for the time we’re putting in. I’ve put in a fair bit of sweat and equity to get to this point. But fundamentally it’s about being passionate – let me put it one way. Sometimes the energy revolution is known as the 3 d’s – Decarbonisation, which is top of people’s agenda, Digitalisation, making smart networks and Decentralisation, which is more local energy. We believe in a fourth D – Democratisation.

This upheaval that’s going on in energy at the moment, is an opportunity to make sure that energy can be decentralised, not just in a physical sense, but in an economic sense as well. There’s real economic clout in the system from, local energy users. We have designed Power Circle to you know, aggregate up energy users. Together we have that economic clout.

“I believe, and the rest of the team believe in social enterprise values. Really, we’re not here to maximise profit for ourselves.”

Jon Cape, Managing Director at Power Circle

Sounds exciting, how do you decentralise and democratise energy?

Jon – We have been working this out now for over the last 10 or 11 years, it’s great that so many people are talking about low carbon energy, we’re becoming more practical and using a different language to describe it. For example back in 2012 we were talking about virtual power stations, no one really knew what they were. Now we have got things called virtual power plants, it’s the same concept. We’ve finally got the technology to do it. Really, the core of this, is smart local energy systems. Rather than having a central power station distributing power, we have a something like the “internet of energy” where there are lots of energy flows in all directions, not just from the centre out to the periphery.

You have been awarded Catalyst Funding; can you explain how that will help Power Circle on the journey to helping others become more low carbon energy aware?

“What we need is sensible money to come in, that shares the upsides and the downsides, and I really take my hat off to Firstport in providing the Catalyst Fund programme with its participating loan structure. It does exactly that.”

Jon Cape, Managing Director at Power Circle

Jon – Let me let me let me step to a wider point. First of all, I mean. If any business wants to grow fast, will normally need a bit of money behind it, and that needs to be risk money. You’re not likely going to be able to offer guarantees on growth or total income. To be honest, you wouldn’t need to go to any investment funding to do that. If you’re a private business, typically that is equity. Someone puts in equity, and that means you know they’re sharing the downsides as well as the upsides. That’s what a young business need. That is what has been for the most part, signally absent in the social enterprise sphere. The response has been daft really, it has been people saying, we can’t afford these loans, so we need lots of grants. We haven’t got the money to throw out grants to people all over the place, but there are some good cases for grants. I’m not decrying them, but we don’t always need them.

What we need is sensible money to come in, that shares the upsides and the downsides, and I really take my hat off to Firstport in providing the Catalyst Fund programme with its participating loan structure. It does exactly that.

The Catalyst Fund shares the upsides and the downsides, this is what we call quasi equity. It shares some of those features of equity, but for social enterprise. It’s not ceding control to a third party. It means that you can stay a socially owned entity. It is a fantastic financial instrument, and to be honest, we we’re very grateful for the funding, but we’re also grateful for it as a role model to say to other funders as we scale up further and have project funding to say, look, why don’t you do a similar thing?

Power Circle secures £120,000 investment from the Catalyst Fund

Any tips for other social entrepreneurs?

Jon – Oh well, you know that old thing, 10% inspiration, 90% perspiration. That wasn’t a joke. Don’t look down, don’t look back. Look forwards and have confidence and but be prepared for that 90% perspiration.

Power Circle offer local energy users access to low carbon energy, but what is it and how can it break down social barriers?

Jon – Well, the short answer. It’s energy that uses less carbon than its predecessors. High carbon energy comes from the burning of fossil fuels, gas, coal. Anything that doesn’t emit carbon into the atmosphere, is low carbon, including how that energy is generated, stored and used. We should be focused on making buildings more energy efficient in the first place. Knowing how much is needed to keep buildings warm in the first place is the cornerstone of low carbon energy.

In some of our project types we go beyond low carbon. We go beyond zero carbon, the phrase we use is climate positive, which translates as net negative emissions. I’ll give you an example, new build homes.

So typically, you know if you see a new bill at home, it’s either got no solar panels on it, or if you’re lucky it’s got a few panels giving two to four kilowatts of power. Now our approach isn’t  jumped up. We did it by looking at hard economics and what makes the most economic sense. What we found was by making the whole roof out of solar PV, IE building integrated PV, instead of two to four kW, there is about 12 to 14 kilowatts of PV in in that roof now. The key thing that our approach means that we’re judging different options not by how much it costs upfront, but the long term economical and environmental gain. Now when you do that, what you find is for typical homes over the course of the year, you’re generating more electricity than you’re consuming. That’s why we call it climate positive.

In some of our project types we go beyond low carbon. We go beyond zero carbon, the phrase we use is climate positive, which translates as net negative emissions.

Jon Cape, Managing Director at Power Circle

How do you overcome the barriers to low carbon energy take up, becoming carbon neutral and setting net zero targets?

Jon – This is part of the journey, the best way is to give them something they can kick, you know present the case study, something they can look at. We have been working with Aberdeenshire council, they came to us with a problem. We showed them a tried and tested pilot that we had ran previously, it has proven to be a huge benefit to them. Giving people completed projects that are operational, so they can see how it works for themselves. It’s important to be flexible and meet people at the point where they are starting from.

What are the benefits of achieving net zero or going climate positive?

Jon – The obvious immediate benefit is that you’re doing it to contribute to Scotland’s climate change targets. There is a lot of evidence and we’ve had from the research consortium looking up and down the UK on this that if you’re interested, you are likely to become an ambassador for change. You can talk to your neighbours or friends and help make the change.

Power Circle have been awarded £120,000 investment from the Catalyst Fund – read more about how the investment will help them grow its team and respond to the increasing demand for its consultancy services, here.

The Catalyst Fund is open for Expressions of Interest. Follow this link for more information about the fund.