To help investors to pool their resources to fund renewable energy projects using existing buildings in South London. If investors pool their resources more can be achieved, more economically with more environmental benefit. Solar energy in South London is the start of SE24’s ambition and has been the main focus of our first successful investments and share offer. Thereafter we may extend our reach beyond South London and beyond solar if that is practically and financially viable
For solar projects SE24 find partners (roof owners) who want solar power and its benefits, and are able to enter into 20 year lease (the lifetime of the Feed in Tariff), but who lack investors. Once SE24 is convinced of the financial and practical viability we offer shares to potential investors who share our vision and who seek a modest return and who want to see the surplus used for community philanthropic purposes.
We completed the installation at our first two sites in summer 2016. We are currently working with two further sites and hope to proceed to a second share offer in early 2017.
What is SE24?
SE24 is established as a legal entity called a Community Benefit Society (CBS). The CBS will raise money from investors through a share offer. SE24 will be registered with and regulated by the FCA (Financial Conduct Authority). Governance will be through a board of directors, elected by members. All investors become members of the CBS with one vote regardless of their shareholding. Projects are financed by SE24 from the pool of funds contributed by investors. All investors fund all projects.
What are the benefits of being a CBS?
A Community Benefit Society (CBS) aims to benefit the local community (it’s in the name!) However it also has other benefits in this context in that the energy efficiency required of partner buildings to be eligible for the Feed-in Tariff are more relaxed than for purely commercial projects.
How much can I invest?
Minimum £500; maximum £20,000. If a share offer is over-subscribed we will either reduce what we take from each investor or seek additional investment opportunities (if the surplus is large enough). However SE24 will not retain shareholder funds unless there are strong prospects for utilising those funds in viable sustainable energy projects.
How does the project make money?
Income comes from three sources: the Feed-in Tariff (FiT) paid by the government, fixed for 20 years, and linked to inflation; the sale of discounted electricity to the partner; the sale of surplus electricity to the national grid also at an agreed rate.
How much could I earn?
No dividends will be paid during the first 2 years after the installation. This is to ensure the accumulation of funds in the general reserve to ensure SE24’s viability. At the first Annual General Meeting thereafter SE24 will declare the detailed policy on how it intends to set dividends and repay the capital. Subject to specific affordability constraints, the intention is to deliver an overall return of 4% repaying both interest and capital each year. Surplus funds will be distributed for charitable community activities.
What are the ongoing costs?
After installation solar projects are low maintenance. Solar panels have a typical life of 20 years. There is typically a 1% per year degradation in efficiency of the panels. Panels which degrade quicker than this may need to be replaced. Inverters (which turn direct into alternating current to feed the grid) need replacing after 10 years.
What happens after 20 years?
After 20 years the CBS will be wound down and the CBS-owned installations will be transferred to the roof owners as agreed in the lease. SE24 investors cease to have a role in the project.
Is my money safe?
SE24 will minimise investment risk by working with professional installers and suppliers, engaging appropriate operations and maintenance experts and taking out insurance policies to maximise the likelihood of reaching the predicted annual MWh production from each project and to aim for a stable and predictable level of ongoing operating and capital costs. Additionally, each projects’ inflation-indexed FiT is guaranteed by government for 20 years. Moreover, the sale of electricity to roof-owning partners will be at the same rate as guaranteed by government for electricity distributed to the grid. So we will be financially indifferent as to whether or not the electricity is used by our roof-owning partners or sold to the grid. The income from each project prior to disbursement will be held in an interest earning account not invested speculatively. Accounts will be professionally audited. Our risk management policy will be outlined in the share offer document. So the income to SE24 and its investors will be relatively low risk but, of course, it can’t be guaranteed.
Can I sell my shares?
Shares are normally kept for the duration of the project. Applications can be made for withdrawing after a minimum of 3 years, but this is granted at the Board’s discretion to ensure the financial stability of the project. This will only be agreed if a new investor can be found to take your place. However if an investor dies, at the discretion of the Board, SE24 will potentially repay the current value of the capital invested to the Executor (as and when funds are available), or to an individual nominated by the investor.
When does the community start to benefit?
Once the financial viability of the project is ensured and the first dividends are declared the community fund will be activated. The target is for this to happen after three years.