The renewable energy market in the UK is now looking set to provide a clean, green energy solution fit for the 21st Century. Technological developments in recent years mean that solar and wind power now represent viable alternative sources of power from fossil fuels. This is just the beginning of the renewable energy story – research into unlocking solar power continues apace and renewable energy is rapidly becoming more efficient (and more attractive). Britain’s largest solar farm to date hit the news earlier this year when the installation generated 15% more power than expected during the winter months of November 2013 to end of January 2014. This was despite the UK suffering some of the worst winter weather we’ve seen in decades.
Investing in renewable energy is becoming an increasingly attractive option as more of us look for ethical ways of investing. Investing in the clean, green energy market is investing in the future. There are different ways of investing in renewable so we’re taking a look at some of the ways with examples of the types of investment opportunities available.
DIRECT INVESTMENTS: Investments where funds go directly into a renewable energy company.
Engynious Schools is a solar project offered by a company which owns and manages a portfolio of roof-mounted solar panels on schools throughout England. This is a debenture investment – it has no collateral and there is a minimum investment of £5 over 19 years with an effective rate of return of 6.7% gross (after fees). The investment is being offered via Trillion Fund, a portal for investments in renewable energy projects which include crowdfunding, bonds or shares in a local co-operative or PLC.
Energy Bonds offers the opportunity to invest in the installation of solar projects across the UK with a minimum investment of just £2,000. Bondholders hold security over all the assets of the issuing company (including income and cash reserves) which further reduces the risk of investing. Funds raised will be used to install solar panels on schools and businesses across the UK (without direct cost to the schools/businesses) with the return on investment being delivered from the government’s FiT and the sale of electricity being used.
FUNDS: A fund manager will assess which companies to invest in and how much.
Guinness EIS 5 was established to make the investments in sustainable energy companies eligible for EIS tax relief. The technologies involved include wind, solar, hydro, biomass boilers and anaerobic digestion with the electricity produced being sold to the grid or to businesses. Several of these schemes will also benefit from the FiT and Renewables Obligation Certificates (ROCs). Over the 3 – 4 year course of investment, the portfolio aims to return £1.50 per £1 invested and a minimum investment of £10,000 applies.
Triodos Renewables Fund works with partners to acquire and develop renewable energy projects and invests in the long term potential of companies in the sustainable energy sector. Focussing on low financial risk project using proven technologies, the projects are selected on the basis that they have a minimal impact on both the environment and on communities. Shares are available to buy and sell on the secondary market.
LOCAL COMMUNITY PROJECTS: These are not regulated financial investments, they represent a way of using your money to save carbon and earn a return. Community energy projects focus on local engagement, local leadership and control and the local community benefiting from the outcomes. Investments held to be long term and have variable returns.
Brighton Energy Co-op 2 is a community energy project committed to bringing solar energy to Brighton and the surrounding areas. There’s a minimum investment of £500 for at least 3 years and the shares are exempt from inheritance tax.