Individuals are being offered the chance to invest in renewable energy projects by participating in an £8m public share issue.
Triodos Renewables plc is launching a new share issue, offering participation in direct ownership of community renewable energy infrastructure.
Proceeds will be invested directly into building new onshore wind power assets. These will join the company’s existing portfolio, which includes installations such as Caton Moor and Dunfermline, all small, onshore windfarms and hydropower schemes.
Four million tradable shares are being issued at £1.90 per share, and the minimum investment is £570.
The performance of Triodos Renewables’ shares over the previous six years has been an average of 6.8%. Over the last single year its return has been 8.5%, with dividends paid to each of the 4,800 shareholders.
This level of return compares favourably to that expected from installing photovoltaic modules under the Feed-in Tariff scheme, now that the basic rate has been reduced to 16p per kilowatt-hour.
In this instance, in a southern UK climate, a 1kWp installation typically produces about 850 kWh of electricity per year (at favourable orientation and not overshaded), providing an annual income of £136.00. This would take around 15 years to pay off at that rate, which represents a simple ROI of 6.8%.
Over the last three years, Triodos Renewables has increased its power generation capacity by 63% and now operates eight sites with a combined capacity of 38.25MW, roughly equivalent to the power needs of 24,000 homes. Its target is to reach 100MW by 2015.
The company has been in the sector for over 16 years and operates in the niche between community and utility scale projects. It is backed and managed by the Triodos Bank. It is, like the Co-operative Bank, which also backs community wind farms with a special fund, one of the world’s leading ethical banks.
Both are experiencing a boost in popularity due to widespread popular disillusionment with mainstream banks. Triodos has €5.6bn under management and holds investments in 361 renewable energy projects throughout Europe.
The Co-operative Enterprise Hub, run by The Co-operative, has committed £6m between 2012 and 2014 to enable it to deliver free advice and guidance to create sustainable member-owned enterprises across the UK, and runs the Co-operative Energy Challenge, which provides financial backing and support to communities wanting to develop renewable energy projects.
Both companies see sensible financial reasons for investing in the community renewable energy sector.
Matthew Clayton, managing director of Triodos Renewables, said: “In launching this share issue we are giving investors the opportunity to participate directly in the energy revolution currently taking place in the UK.
“The funds raised will be put to work very quickly building new projects and we are therefore targeting 9% to 10% annualised rate of return on investment to our shareholders over the long term.
“The UK is at a crossroads at which choices need to be made that will decide where our energy comes from in the future. Our share offer allows investors mindful of the convergence of climate change, energy security issues and the need transition to a safe and sustainable energy future, a chance to make a real difference and expect a good return.”
Its backers estimate there are currently 691 MW worth of wind power projects in their target range of 1-25 MW which are in planning or with consent and are likely to be sold (based on information provided by Renewables UK).
In the immediate term, there are exclusive opportunities to acquire two further wind farms this year with a combined generation capacity of 10.7 MW. One is a four-turbine site in the South West of England and the other is a single-turbine site in Yorkshire. Both are on brownfield (i.e. industrial) site locations.
The share subscription list closes at the end of August.
Story: David Thorpe, News Editor
Source: EAEM (