The future’s bright, the future’s green

Written by Lisa Stanley Mann on 26th Jul 2016

If your mind wanders to where on earth to invest your cash while you are relaxing on a beach this summer, then renewable energy crowdfunds might be worth more than a passing thought.

That’s because there are suddenly loads of them, and in this low interest rate environment, the returns of around 6 per cent are noteworthy, given the risk level.

Businesses using Crowdcube have raised more than £13 million for the clean tech sector since 2015. Investors have piled £20.3 million into Abundance. They are not alone. Energy4All, Trillion Fund and Triodos Renewables have all successfully crowdfunded raises for renewables in the last couple of years.

The UK renewable energy sector is growing. We have tough carbon dioxide emissions targets that have not yet suffered post-Brexit. This means that subsidies will continue in the near term, although will be removed as technologies mature. It is a compelling trend for investors.

Why so many renewable technology businesses raising money on crowdfunding sites?

It has become quite the thing, as the original investors that got the projects off the ground seek an exit, and the risks and returns that the projects offer begin to reflect a profile that is palatable for normal investors.

Andrew Wordsworth, Managing Director of Sustainable Venture Development Partners and co-founder of E-Car Club, the company behind the UK’s first crowdfunding exit, said: “Cleantech will cease to be a distinction, as resource efficient business becomes the norm. From an investment point of view this will see an ongoing increase in corporate investments and acquisitions, which will open up a range of opportunities for entrepreneurs and crowd investors.”

What are the current opportunities?

Crowdcube lists several equity crowdfunding investment opportunities, ranging from Verto Homes, which designs, builds and sells intelligent, sustainable homes, which produce and store clean energy from the sun and do not burn any fossil fuels for either light or heat; to – an internet platform enabling schools to generate their own solar energy by bringing schools and financing together to cut CO2, save money and inspire children; to ventilation company, Ventive, whose patented products include a new range of ventilation devices, creating a healthier environment while reducing running and maintenance costs.

Look at other sites, too, and the opportunities are bountiful.

New investment-led platform Downing, has a number of bond / debt-based opportunities – for example, Woodbridge Solar, a 9MW operational solar farm in Rutland; York Green Wind, a company with a portfolio of four wind turbines paying 5.5% p.a. fixed over one year; and in the last four months has offered two other solar bonds as well as a two-year investment in an Anaerobic Digestion plant in Norfolk.

The more established Abundance Investment platform also has a range of debenture offers, from Living Power, which uses recycled cooking oil to send power back to the grid, to Share Solar, an operational solar portfolio benefitting from pre-2012 Feed in Tariffs.

Julia Groves, head of crowdfunding at Downing says: “Whatever your politics, it won’t be long before the rest of the country cottons on to the future potential of this sector. The crowdfunding sector has always been a bit of a trailblazer and the growing wealth of green opportunities indicates that this continues to be the case.”

Hayden Wood, cofounder of 100 per cent renewable energy provider Bulb, adds that the need for further investment in renewable technologies is all the greater since Britain voted to leave the EU: “The EU has lead the world when it comes to carbon reduction. European nations working together played a vital part in achieving the Paris agreement last year. The UK Government has indicated they remain committed to the Climate Change Act, a piece of national, sovereign legislation unaffected by EU membership, which requires an 80% reduction in emissions by 2050. But now Britain has voted to leave the EU, more uncertainty means funding for renewable infrastructure – funding we badly need to meet those targets – may well be put at risk.”

So if you’re wondering where to invest some of your hard-earned cash, now the FTSE’s all upsy-daisy, you could consider allocating a small part of your portfolio to renewable technology. Crowdfunding offers you a transparent way to do that directly.

One of the reasons we set up Good With Money was because we recognise an increasing number of people are looking for good financial deals that benefit the environment or society, as well as their own pockets.

Green crowdfunds tick all the boxes.

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