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Community Share Offers
- 1. Community Share Offers Ways Forward conference 17 January 2014 Jeremy Thorp jeremy@sharenergy.coop www.sharenergy.coop
- 2. Renewable energy co-ops, local ownership and control e.g. • Leominster Community Solar, £150k shares, 93 members • Neen Sollars Community Hydro, £150k in shares, 77 members • Woolhope Woodheat, £320k in shares, 168 Members • Many other examples
- 3. What are renewable energy co-ops for? (different order of importance for different people) • green electricity / carbon emissions? • To put power generation in the hands of the public? • To generate income for another purpose (community benefit or otherwise)? • To create an ethical investment opportunity?
- 4. Features of renewable energy coops Leominster Community Solar • Structure of electricity market makes it difficult for members to “trade” • How to share profit? • What is a “fair rate of interest” ?
- 5. Factors to consider • How to factor in risk? • The need to publish a target interest rate before launch of share offer – difficult to adjust later • How to engage with enthusiasts and pale greens? • target interest rate likely to be exceeded = better returns. Is this OK?
- 6. More factors • Different technologies regarded as different level of risk • If the community fund benefits a popular cause, it will help to compensate for a low interest rate • Tax relief – this can boost effective rates of return • Not enough examples to establish what return is just sufficient to raise the amount required – too many variables
Notes de l'éditeur
- Sharenergy helps to set up co-ops as a way of raising capital to install renewable energy generation that is locally owned and controlled and where the benefit is kept in the local community.
- To generate green electricity/energy and reduce carbon emissions?To put power generation in the hands of the public?To generate income for another purpose (community benefit or otherwise)?To create an ethical investment opportunity?
- All renewable energy schemes have some risk, how do you factor this in?The co-op needs to publish a target interest rate before launch of share offer – difficult to adjust if you find the share offer is failing to reach your targetIf a scheme is small, you can probably find “enthusiasts” that will put in money whatever the return. For a big scheme, you will need to appeal to “pale greens” that will only invest if it is attractive enough. Is the co-op justified in trying to reach pale greens?conservatism in forecasting (small c) means that the target interest rate likely to be exceeded = better returns. Is this OK?
- Different technologies regarded as different level of risk – PV seen as low risk, woodchip heating as high riskIf the community fund will benefit a popular cause, it will help to compensate for a low interest rateTax relief – this can boost effective rates of returnThere have not been enough examples to establish what return is just sufficient to raise the amount required – too many variables