Investing in renewable energy

[cliffski]

Is there already a topic for this?

I have a small (2kwp) solar install in my garden, and not the right land ton consider a bigger install. I'm also more of a fan of wind energy than solar in terms of payback, and am interested in putting my money where my mouth is. I'm fortunate enough to have some spare cash (more than thousands, less than millions ) to invest.

The problem is, it seems very hard to make a decent investment in green energy. The obvious example is Vestas, but they are foreign owned, and I'd like to invest in UK companies. There are a lot of 'community-based' or 'non profit' funds available, but there doesn't seem to be an easy way for someone to make a commercial investment in UK based green energy.
I'm not really a fan of buying shares in a company like Shell or BP, which may well invest big time in renewables, but also in stuff I'd rather not support. I was vaguely interested in the triodos renewables flotation, but lots of stuff about it put me off.

Ideally. there would be some UK-based green energy company that was building a wind farm and selling shares in the project directly, whether a big huge multi million pound investment with hundreds of shareholders, or more idylically, a local company building a single mid-sized turbine and divvying it up into shares.
Does anyone know of stuff like that happening? Anyone here invest directly in green energy startups? anyone got together with like minded individuals to lease land and set up a solar or wind energy investment on a larger (not just a few kilowatts) scale?

[wookey]

Ecotricity's ecobonds and Wind prospect's ReBonds offers (http://www.rebonds.co.uk/, http://www.ecotricity.co.uk/about-ecotricity/ecobonds ) were both nice direct investments, and Ecotricity is entirely UK-owned. You also already know about the slightly funky Triodos scheme. Sadly both ecobonds and rebonds got all the money they needed and are now closed, so the current choice is currently Triodos or Triodos. Like you I am not entirely sure about that offer. I wish I had gone for the wind bonds, but was building an extension at the time, so both preoccupied and less flush.

I have not found a renewable fund that I like, although clearly massive amounts of dosh is currently going into wind farms, just not money from people like us. There is a thread on RE investment here:
http://www.greenbuildingforum.co.uk/newforum/comments.php?DiscussionID=7561

[renewablejohn]

Ideal solution for you. How about direct investment in a 250kW Wes 30 turbine on a very windy hill top site in Lancashire.

Just to put you in the picture I have been struggling to find any bank willing to support the 600k investment  in the tried and tested Wes 30 turbine. The company banks with Triodos so we naturally assumed we would be eligible for some of the Triodos Renewables funding but it turns out the funding is only for large turbines in excess of 1MW not 250kW which is the maximum most UK farmers are restricted to due to the constraints of the rural 11kv grid system. Similar constraint with the Coop although they also made the point that due diligence cost the same for a 1MW or 250kW so not economically viable to invest for 250kw. Next on the list was Handelsbanken but they cherry pick their clients and farmers are not an acceptable risk. Onto Nat West who do not have direct loans available at the moment but may offer finance through there asset management Lombard. Lombard would provide finance but only 50% at extortionate interest rate as the turbine has no resale value due to the Fits rules of only being available for new equipment. Barclays new scheme for renewables just launced aimed specifically at farmers £100M available, might lend upto 75% but will need £1m of security.

So do we have 60 investors out there willing to invest £10,000 each for a guaranteed return of 10%.

 You would think with the government guarantee on Fits income banks would be fighting for the most favourable wind sites.

[dhaslam]

It does seem a bit expensive for a 250 kW turbine.     The 1 mW  ones were costing about 1m€ to install in Ireland, usually in  threes to save on connection costs.    Funding in Ireland was  usually a mixture of  BES and bank funds with typically no contribution from the owner except the site and a lot of hard work and patience.   Now of course bank funding has dried up, a lot of the funds came from the infamous Anglo Irish Bank.   

The problem with these  machines  it is hard to  raise the  the sort of money needed.   Because of  the long term benefits  to  rural  areas  it would be good to have  community owned  co-ops  instead of  large companies  owning them but it would be a difficult to get started.

It would be good to have  a permanent thread on investment possibilities.    Particularly new companies that have inventions in the alternative energy field and need support, even if the investment is high risk.           

[rondurrans]

renewablejohn has there been a feasibility study completed - does it have planning permission - what about connection to the grid - etc.

Thanks,
Ron

[renewablejohn]

It does seem a bit expensive for a 250 kW turbine.     The 1 mW  ones were costing about 1m€ to install in Ireland, usually in  threes to save on connection costs.    Funding in Ireland was  usually a mixture of  BES and bank funds with typically no contribution from the owner except the site and a lot of hard work and patience.   Now of course bank funding has dried up, a lot of the funds came from the infamous Anglo Irish Bank.   

The problem with these  machines  it is hard to  raise the  the sort of money needed.   Because of  the long term benefits  to  rural  areas  it would be good to have  community owned  co-ops  instead of  large companies  owning them but it would be a difficult to get started.

It would be good to have  a permanent thread on investment possibilities.    Particularly new companies that have inventions in the alternative energy field and need support, even if the investment is high risk.           

Unfortunately the turbine companies know that Fits only applies to new installations so in the last 18 months I have watched the price of a WES 30 increase from 400k to 500k due to the increase in price of steel (rip off) plus £75k for our local DNO to install transformer and connect to grid. £25k for the planning application including bat survey, noise, radar and planning advisor.
Makes you wonder whether it is worth going down the Fits route as a second hand Wes 30 would only cost £150k and would generate just the same amount of electric.

[renewablejohn]

renewablejohn has there been a feasibility study completed - does it have planning permission - what about connection to the grid - etc.

Thanks,
Ron

Feasibility study completed estimated 130k income per annum. Ready to submit planning application with support of local council 2 other turbines been approved and erected in the village within last 6 months.  3 miles away from 25 x 1MW turbines saddleworth moor 2 miles away from 12 x 1MW Accrington moors currently being erected. Adjacent to supergrid electric line so in theory not detracting from the view of the pylons. DNO confirmed grid will accept 250kW export but cost of £75k for the priveledge of connection.

[rondurrans]

As part of the feasibility did you look at the operating costs? Would it be set up as a Ltd company with shareholders taking dividends?

Thanks
Ron

[cliffski]

So do we have 60 investors out there willing to invest £10,000 each for a guaranteed return of 10%.

Potentially there may be. I am definitely interested, although to find another 59 might be tricky?. Owning a share in a wind turbine would be extremely interesting to me. It would have to be set up as a proper limited company with shares, as described, but that's trivial (I run a tiny limited company myself ).
I'm surprised there isn't already a system set up to 'crowdfund' stuff like community energy projects. I know Hugh fearnly whattnot is involved with one, but it seems to be a charity, not a commercial proposition. If I was not already an overworked close-to-stress-heart-attack maniac, I'd be setting up such a company / website myself.

[rondurrans]

Wind Turbines UK Installs The First WES 30 Wind Turbine In The UK

http://www.windturbinesuk.co.uk/index.htm

[renewablejohn]

Wind Turbines UK Installs The First WES 30 Wind Turbine In The UK

http://www.windturbinesuk.co.uk/index.htm

As the crow flies approx 5 miles away from us. Same company has done all the feasibility for our site with the company commenting that ours is a better site being more open. We choose this type of turbine for its low cut in speed and high cut out speed.

[renewablejohn]

As part of the feasibility did you look at the operating costs? Would it be set up as a Ltd company with shareholders taking dividends?

Thanks
Ron

To date only looked at buying turbine outright and paying a commercial interest rate given the pitiful rates currently on offer by the major banks.

Operating costs are covered with an annual maintenance agreement of approx 10k. Only other cost is landholders rent and a meter maintenance charge.

[cliffski]

Operating costs are covered with an annual maintenance agreement of approx 10k. Only other cost is landholders rent and a meter maintenance charge.

10k? The www.windturbinesuk.co.uk site says:

How much service cost is there?
Service costs are generally low. The annual estimated service cost for a WES18 is € 750,0 and for the WES30 it is € 2.000,00.

[rondurrans]

renewablejohn do you have access to 'actual' output figures for the WES 30 kW for the one five miles away from you and how long has it been operational.

Have http://www.windturbinesuk.co.uk/index.htm not been able to help you with financing this project?

Thanks
Ron

If you were padantic you might question the website RE: KWh when it should in their example be just kW and they have used kw when once again it should be kW........bit concerning when they are in the business.

[Eleanor]

They used Kw as well  
I don't think that not being able to spell or know units has ever stopped anyone making money though ...