Community finance platform launches solar panel investment scheme to promote renewable energy
Investors seeking a green approach to profits are being invited to put as little as £5 into a project that could, organisers say, deliver a return estimated at up to 8.6%.
Abundance, which went live in April 2012, has has launched a fourth project, this one focused on solar electricity.
The company describes itself as a "community finance platform" allowing small investors to put money into UK renewable energy schemes and receive a regular cash return based on the energy produced.
This latest project is run by Oakapple Renewable Energy, based in Leeds. The money will fund a portfolio of rooftop solar panel systems on new-build homes across the UK that are eligible for the government's feed-in tariff. Homeowners can use as much of the electricity generated as they need, for free, while investors get an "estimated return" of 7.35% to 8.6%.
Abundance has funded three projects so far, with £2.3m invested in total. This included a £1.4m fund for a community wind turbine in the Forest of Dean, Gloucestershire.
The platform says it works in a similar way to "peer-to-peer" lending websites – putting investors in touch with community groups and companies that want to build environmental projects. It collects the money and organises the payouts in return for a 1.9% fee paid by the body that builds and operates the project. Individuals can invest as little as £5 in this particular project, or as much as £50,000.
Those who put money in will be buying debentures, which are like official IOUs issued by the individual energy projects. In return, the project commits to pay the individual a share of the profits from generating green energy.
Returns, paid twice a year, will be variable over the 20-year span of the investment. The original investment is paid back over its lifetime or as a lump sum at maturity. However, investors can sell to access funds earlier through the Abundance website.
As with most such schemes, investors should take note of the detail. Abundance is authorised and regulated by the Financial Conduct Authority. However, if the project went into administration and assets were sold off, debenture holders would get paid out first ahead of shareholders.
There are also a number of community co-operatives around the country that allow people to invest in renewable energy and, hopefully, share in the financial benefits.
The Spirit of Lanarkshire Wind Energy Co-operative has unveiled a public share offer to raise up to £2.7m for stakes in the Nutberry and West Browncastle wind farms near Coalburn and Strathaven respectively.
The co-operative has been created by Energy4All, a not-for-profit organisation which helps communities around the UK develop renewable energy schemes. Individuals and organisations can invest between £250 and £20,000 by buying shares. A spokesman says: "If these wind farms perform as well as existing Energy4All Scottish co-ops, we can expect an average annual return of around 8.5%."
The co-op intends to repay the original investment after 20 years, but says it may be possible to withdraw money before then on request. The share offer is open until next March. If oversubscribed, priority will be given to South Lanarkshire residents.
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