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 was the start of SE24’s ambition and has been the focus of our first three successful investments and share offer. We are now starting a new type of project – funding and installing energy saving LED lighting in local schools.
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.
Frequently asked questions
What is SE24?
In 2015 SE24 was established as a legal entity called a Community Benefit Society (CBS). The CBS can raise money from investors through a share offer. SE24 is registered with and regulated by the FCA (Financial Conduct Authority). Governance is 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.
How much can I invest?
Minimum £250; maximum £25,000. 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 various sources. For Phase 1 and 2 solar PV projects we are paid a Feed-in Tariff (FiT) fixed for 20 years, and linked to inflation. On all solar PV projects we sell discounted electricity to the roof-owning partner and sell surplus electricity to the national grid at an agreed rate. On LED projects the partner pays us an agreed proportion of the cost saving they achieve by conversion to LED.
How much could I earn?
No dividends will be paid during the first 2 years after a solar PV 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 3% 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.