A worker co-operative that designs and installs renewable energy systems has received a loan from a fund set up by co-operatives.

The Co-operative Loan Fund, established by the Co-operative Group, Midcounties, East of England and Chelmsford Star, offers loans of up to £75,000 to other co-operative businesses.

R-ECO, which has branches in Cornwall, Bristol and Oxford, will use the loan as working capital to buy the equipment, material and labour it needs to take on bigger contracts.

The business, which creates bespoke renewable energy systems for domestic, commercial and community clients, aims to bring a co-operative approach to the renewables market and has recently secured several large commercial contracts.

Technical sales advisor Tim Nicholson from the co-operative said: “Commercial projects can be challenging for companies like ours because we don’t have a lot of capital. We approached the Co-operative Loan Fund to see if they could help.

“The loan facility has allowed us to take on a variety of larger contracts. It’s very positive for our business that we are able undertake a diverse range of work.”

At the end of 2011, the government announced that energy feed-in tariffs would halve, a move which severely disrupted the renewable energy market and heralded a significant drop in business for R-ECO. The co-op diversified into other areas of renewable energy to compensate – including the installation of heat pumps, solar thermal and biomass boilers – although solar panels remains its core business.

Recently, the equipment and modules required for solar panel installation have become cheaper, improving the market. In particular, solar farm investments and interest from residential clients has increased, helping R-ECO to continue expanding and developing its services.

Loan adviser Ian Rothwell, from Co-operative and Community Finance, which manages the fund, commented: “It’s great to be able to support a co-op that has contributed so much to the renewable energy sector over the last few years – co-ops have always been a champion of renewable energy. R-ECO has overcome challenges caused by the reduction of solar feed in tariff (in 2011), and is winning bigger and bigger contracts.”