SE24’s 2021 Share offer is now live
You are invited to invest in SE24’s latest community energy projects: to put solar PV panels on the roofs at Charter School North Dulwich and to retrofit both Charter School, North Dulwich and Charles Dickens Primary School, Borough with efficient LED lighting.
OVERVIEW OF SE24’s 2021 SHARE OFFER
Following our applications to the GLA London Community Energy Fund (LCEF), SE24 was granted £14,300 to investigate the feasibility of a solar photo-voltaic installation on roofs at The Charter School North Dulwich a large local secondary school which is part of The Charter Schools Educational Trust.
SE24 also secured a capital grant of £56,000 (covering one third of the required capital) towards two LED lighting projects – a large project at Charter School, plus a smaller one at the Charles Dickens Primary School in Borough, which is also part of the same Trust.
We are very grateful for this support provided by LCEF, backed up by the GLA, which recognises the vital role that Community Energy organisations can make to meet climate change targets in London and across the UK, whilst delivering long term benefits to local communities.
Following the feasibility studies, we are now progressing these projects. The next step is to raise the money we need to meet the rest of the project development and capital costs.
We are aiming to raise £240,000 to be used as follows:
- £102,900 to fund the installation of roof-top solar photovoltaic (PV) panels at The Charter School, North Dulwich (a 117-kW peak installation).
- £132,500 to complete two LED lighting installations: one at The Charter School, North Dulwich (providing 1,750 LEDs/fittings), the other at Charles Dickens Primary School, Borough (providing 140 LEDs/fittings).
- £4,600 contingency in case of any installation cost over-runs.
The benefits of these projects
The solar installation at The Charter School, North Dulwich will generate around 100 megawatt-hour (MWhs) of clean solar electricity and save approximately 22 metric tonnes of CO2 emissions annually.
Moreover, after meeting SE24 charges to recover costs of the investment and operation, The Charter School, North Dulwich will save around £150,000 in electricity costs over 25 years, enabling them to direct more funds to meeting the needs of their users and the communities they serve. SE24 will receive revenue from selling the generated electricity to the school and to the grid.
The LED installations at The Charter School North Dulwich and Charles Dickens Primary School, Borough will save about 120 Megawatt hours (MWhs) of electricity consumption annually (around 15% of current electricity usage) and save approximately 30 metric tonnes of CO2 emissions annually.
Moreover, the LED installations will save the schools about £8,000/year in electricity costs over the 10-year contract term after meeting SE24 charges to recover the costs of installation and spares. SE24 will receive revenue from the school sharing these cost savings with us over the 10-year period.
The investment opportunity has two different time horizons.
- The two LED projects have a 10-year contract so the investor payback horizon is 10 years.
- For the solar PV project at The Charter School, North Dulwich the proposed contract is 16 years, and the investor payback is scheduled to take place within 15 years. This reflects the much longer asset life of solar panels (normally 25 years) as compared with around 10 years typically expected from LED lighting.
Accordingly, this Share Offer has two different payback: 10 years for the LED projects (which absorb just over half of the total funds raised) and 15 years for the Solar PV project.
Unless the share offer is under-subscribed, as explained below, investors would invest in all three projects (one solar and two LED), on a pro rata basis.
If the share offer is under-subscribed and we don’t reach our £240,000 target we will give priority to completing the LED schemes because we have received GLA capital grants for this purpose. In that event, we would allocate subscribed capital to complete the LED projects and return any excess funds to such investors. We would then intend to launch a further, separate share offer at a later date to finance the installation of the solar project.
SE24 Community Fund
By investing in this share offer investors will also help generate revenue for our Community Fund. This has been running for three years and is currently used to help tackle fuel poverty in South London – providing much needed assistance to those who need to choose between heating and eating. Over 16 years, we expect these new projects to contribute some £60,000 to the Community Fund.
Impact on SE24 portfolio and finance
These projects should strengthen SE24. The solar project at The Charter School, North Dulwich will significantly increase SE24’s solar generating capacity. The LED project provides a new revenue stream.
SE24’s finance raising track record
We have a successful track record in raising finance to complete our projects. To date, we have raised over £240,000 retained funds.
- Our first share offer, in 2016, raised sufficient finance to install solar PV projects at Herne Hill United Church and at Herne Hill Methodist Church Hall.
- SE24’s second share offer in June 2017 raised sufficient finance to install solar PV systems at St Christopher’s Hospice and two installations at Dulwich College (Sports Centre and Lord North building).
- SE24’s third finance raise was our successful bid for capital funding from the BA Carbon Energy fund to complete our Walworth Road Methodist Church solar PV installation. Together with some £5,000 internally generated funds/SE24 reserves, this allowed the completion of that 25-kW facility.
We have also demonstrated some flexibility in allowing shareholder withdrawal and replacement (although this cannot be guaranteed). In 2020 we enabled existing shareholders to exit, for personal reasons, with existing and new shareholders buying £23,000 of their shares with some £7,000 covered by internally generated funds/SE24 reserves.
Reasons to invest
If you invest in this offer you will benefit financially and become part of the Community Energy revolution.
- SE24 will aim to pay 3% annual return on your investment.
- You will help the schools direct more of their funds towards serving their users and community.
- You will help make an impact on reducing local carbon emissions.
- The projects you support will generate further contributions to our existing Community Fund.
- Share offer opens on 18 June 2021. Share offer closes on 18 July 2021.
- Minimum investment per member: £250; Maximum investment per member: £25,000.
- If over-subscribed, small investors (those investing between £250 and £1,000) will be given priority. Other investors’ allocations will be scaled back proportionately.
- If under-subscribed we will prioritise the LED schemes, as set out above.
As with all risk investments, these shares could lose some or all their value and they are not protected by the Government’s Financial Services Compensation Scheme or the Financial Ombudsman Service. We are not a bank or a regulated investment product provider.
The share offer document spells out the risk factors, notably: weather variation affecting generation; failure or breakdown of equipment such as panels or inverters; theft or damage; changes to regulatory environment or tax liability; insolvency of partners; changing economic conditions; incorrect assumptions about RPI.
Whilst the SE24 directors have endeavoured to minimise such risks, potential investors should be aware of the potential impact of such risks on SE24’s ability to provide a 3% return and repay invested share capital.
If you are uncertain whether investing in SE24 is right for you, you should consult an Independent Financial Advisor.
SE24 dividend record and operational reserve requirements
To date our performance has delivered on prior expectations of dividend returns with the single exception that last year (2020) we had to re-consider shareholder payments due to a combination of lower-than-expected generation due to faulty equipment and slow repair by our contractor at some of our sites and the impact of COVID-19 which reduced on-site consumption at our school and church sites.
The decision was made to stagger the 2020 shareholder payments with half of expected payments paid on schedule September 2020 and the remaining half to be paid in June 2021. On the basis of recent financial outcomes and projections these second stage payments can be made, and our intention is that future payments will be made on or around the planned schedule.
What drives actual shareholder payments is cash flow and our prudent reserve requirements. Our operational reserve is £10,000. We need to have that much cash in the bank to pay for eventualities such as repair or equipment replacement costs and any associated loss of income. This is especially important going into the winter period when little solar generation revenue can be expected.