Thousands of solar panels in the Dorset countryside will soon help power Britain’s historic financial centre under a new renewable energy deal struck by the City of London Corporation.

The City’s governing body expects to save GBP3m by buying more than half of the electricity powering the Corporation’s historic buildings in the Square Mile from a subsidy-free solar farm in the south-west of England made up of 95,000 new solar panels over the next 15 years.

The 49 megawatt project, to be built by French renewables company Voltalia, is expected to generate enough green electricity to power the equivalent of 15,000 homes, or half the energy required to run the Square Mile’s historic Guildhall buildings, the Barbican arts centre and Smithfield market.

The clean energy will also be used to help power the Billingsgate and New Spitalfields markets, which are overseen by the City Corporation due to their historic links to the Square Mile.

The governing body has run Britain’s historic financial heart on green energy sourced from existing renewable energy projects since 2018, but the new GBP40m deal will mark the first time the Corporation will help build a new renewable energy project.

The City of London hopes that the “pioneering” green energy supply deal will form a template for other local councils across the country to cut their carbon emissions and save money on their energy bills by investing in renewable energy without the risk.

The deal is one of the first of its kind because it allows the council to pursue a clean energy agenda while avoiding the financial pitfalls which led to the high-profile failures of council-owned green energy companies in Bristol and Nottingham.

The City of London last month set out new climate targets to become carbon neutral by 2040, a decade ahead of the UK government’s legally binding goal to reduce the country’s emissions to virtually zero by 2050.

Jamie Ingham Clark, from the City of London Corporation, urged other local authorities across the UK to adopt the “pioneering scheme” which would allow them to “play their part in reducing emissions without the risks of owning their own energy firms or infrastructure, and without the need for government funding”.

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“The deal, which is an integral part of our ambitious climate action strategy, will help cut emissions and give us a cheaper, more secure electricity supply protected from the price volatility of energy markets,” he said.

“Like many organisations, we face an uncertain economic landscape in the wake of Brexit and Covid-19. However, we can’t allow that to prevent us tackling climate change, which is now recognised as a global issue which requires immediate action and investment,” Clark added.

The structure of the deal also provides enough investor certainty for Voltalia to move ahead with its plans to add to its 22-strong stable of UK solar farms without the need for a government subsidy.

o This article was amended on 18 November 2020 to clarify that the renewable energy deal covers only Corporation buildings in the Square Mile, not all buildings in the area.

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