The rise of community energy

Written by Lori Campbell on 16th Aug 2018

The sustainable farm where BBC radio soap The Archers was created has launched a £1 million community share offer to help protect it for future generations.

Stockwood Community Benefit Society, which owns Rush Farm and business park in Worcestershire, is offering shareholders the chance to make a positive social and environmental impact with their money while ALSO earning a 5 per cent financial return.

Rush Farm – where BBC Radio 4 show The Archers was written and recorded in the early 1950s – is the UK’s only 100 per cent community-owned farm that offers shareholders a regular return on their investment.

The 190-acre farm encompasses organic animal farming of Hereford cattle and Lleyn sheep, renewable energy projects and an ethical business park that employs more than 200 people. The farm is also a natural haven for wildlife.

The farm’s ground source heating and cooling system generates 86 per cent of the business park’s total energy demand. To offset the purchase of electricity from the grid required to power the heat pumps, Stockwood CBS has installed 170 solar panels which can generate 50 kW of clean electricity. The renewable energy project creates over £50,000 of income for the farm, on top of the rent brought in from the business park.

The sustainable and ethical business model enjoys strong support from over 300 investors who hold equal voting rights and have become part of an inclusive community. So far, the farm has raised £1 million from investors. The new share offer pays a 5 per cent return over four years with a minimum investment of £100. Shares are available through Ethex or Stockwood CBS.

Sebastian Parsons, Chief Executive of Stockwood CBS, said: “Stockwood showcases that it is possible to have a thriving and sustainable farm business that enhances the wellbeing and security of the local community. We’re asking people to ethically invest in a project that will have decent returns and high social and environmental impacts.”

The business now wants to build on its success by holding a conference in Spring 2019 to meet potential partners interested in starting similar projects elsewhere in the UK.

Mr Parsons added: “The potential for this business model to be scaled up across the UK to protect land for future generations is huge. There are hundreds of farmers looking to diversify who have empty outhouses ready to be transformed into business parks that will support the local economy.

“Their land can provide a source of wealth and health for the community where nature and farming thrive. We want to hear from people interested to make this happen.”

The idea that communities can install, own and reap the rewards of renewable energy while also making a return on their investment is growing fast.

A recent survey from ethical bank Triodos revealed that almost two thirds (64 per cent) of investors would like their money to support companies that are profitable and at the same time make a positive contribution to society and the environment.

There are an increasing number of opportunities for investors to find a new connection to their money and to see exactly how it is benefiting people and the environment.

Lendahand Ethex, a joint venture between two of Europe’s leading online impact investing platforms, is enabling its customers to track the impact of their money for the first time through a new portfolio tracking tool.

Investors in the ‘Energise Africa’ project – which brings solar power to households across sub-Saharan Africa – will now be able to view detailed updates on how their funds are being used. Online maps will show where solar power systems have been installed, the number of households and people that have benefited, the extra hours of light gained and the Co2 emissions reduced.

“Ethical investing isn’t just about thinking that your money is doing good; it’s about demonstrating that it is doing good,” said Lisa Ashford, managing director of Lendahand Ethex. “Customers want easily accessible, transparent products with the potential to generate fair returns and increasingly they want to be connected with their money, seeing exactly how their investment is benefiting the environment and communities.

“We are delighted that we are now able to provide Energise Africa investors with the ability to easily track the social, environmental and financial impact of their investment via our new portfolio impact tracking tool.”

Lendahand Ethex has raised more than £4.5 million to date from 1,000 people investing in 36 projects across Africa. These investments have enabled more than 180,000 people to access affordable solar energy in Uganda, Kenya, Mozambique, Tanzania, Rwanda and the Democratic Republic of Congo. The latest projects available are located in Burkino Faso.

Investors can support the Energise Africa project with a minimum deposit of £50, with targeted returns of up to six per cent per year. Customers can also benefit from tax-free returns by holding their Energise Africa solar investments within an Innovative Finance ISA.

Lendahand Ethex estimates that there are 600 million people in sub-Saharan Africa who have no access to electricity. Through Energise Africa’s solar businesses, households can borrow the money to install solar panels. The money is then paid back monthly over a one or two-year period.

The huge rise in popularity of green energy and community projects among UK investors has been revealed in a new study by Oaksmore ISA.

Of the 1,627 people asked where they would like to see their funds invested, 19 per cent chose projects with green credentials, with a further 19 per cent choosing community projects. These categories were more popular than investments in either large private businesses (18 per cent), or small and medium-sized business funds (16 per cent).

Oaksmore ISA, an alternative investment fund manager, believes the appeal of green energy and projects that deliver tangible benefits to communities is a powerful force.

Spokesman Reuben Skelton says that Innovative Finance ISAs are the ideal vehicle for would-be investors who have an interest in green and community projects. He said: “The IFISA model gives providers the flexibility to find schemes that deliver on these needs expressed by potential investors.

“For example, our own scheme allows people to invest in the renovation of heritage property, bringing beautiful old buildings back to use. This not only supports the country’s national heritage, but also delivers value back into communities by creating places to live and work.”

Read the Good Guide to IFISAs here

Mr Skelton added that investors are likely to be particularly keen on projects that would benefit where they live or know. He said: “It’s easier to visualise the impact, and assess the risk, in an area we know well. This underlines the true motivations of such investors who want to feel more personally connected to their investments.”

The growing popularity of community-funded projects is also demonstrated by Stroud Brewery, which has hit its crowdfunding target three weeks ahead of deadline.

The award-winning organic brewery launched a campaign with sustainable bank Triodos to raise £300,000 to pay for a bigger brewery and bar opening in the autumn. Members of the public were offered the chance to buy bonds in the brewery for a minimum investment of £1,000.

Despite giving itself a deadline of the end of August, the Brewery – which has an annual turnover of close to £1 million – has already raised the capital it needed.

The brewery has been running for 12 years, with a focus on producing beer locally and sustainably. It uses short supply chains and lightweight packaging as well as re-using waste grains and hops for cattle feed and compost. The malt and barley are sourced from within 15 miles of its home in Thrupp, just outside Stroud in Gloucestershire.

The new site has been designed to accommodate the organic brewery’s growing needs, providing greater capacity for beer production, storage facilities, larger offices and a new taproom. It will also further improve the green credentials of the company with heat reclamation, rainwater harvesting and solar powered electricity.

Richard O’Brien, corporate finance manager at Triodos Bank UK, said: “This was one of the fastest crowdfunding campaigns we have done and its success shows the support for strong local organic businesses.

“Stroud Brewery has an impressive management team and commitment to sustainability through its whole supply chain. This investment offer raised significant local interest in our crowdfunding site with just under half the amount raised from people in Gloucestershire.”

Earlier this year Triodos became the first registered UK bank to launch an investment crowdfunding platform. It has since raised £18.2 million across seven deals. The site exclusively focuses on raising money for ethical businesses and charities that deliver a positive environmental, social or cultural impact.

Want to know which are the top ethical and sustainable funds in the UK for both financial and ethical performance? Download the Good Investment Review from Good With Money and 3D Investing today.

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