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Solar projects turn to crowdfunding to secure UK's energy future
by James Poulter on Aug 09, 2013 at 13:40
Two small-scale renewable energy projects have raised over £700,000 through online investment platform Abundance Generation, part of a growing trend for fledgling businesses to turn to crowdfunding.
Brighter Schools, which installs solar panels on schools for free, and Oakapple Renewable Energy’s Oakapple One project, which is funding a portfolio of solar panels on newly-built homes, both received backing via the popular source of new capital.
Abundance lets sustainable investors purchase and trade debentures in UK renewable energy projects and has raised £3 million since its launch last summer.
Founder and joint managing director Bruce Davis said the £700,000 raised in 35 days for the projects sets a new record for the platform.
‘[This] shows the growing potential of democratic finance and crowdfunding to fill the gap left by banks in lending to this important infrastructure investment for the UK’s future energy needs,’ he said.
Investors in Brighter Schools hope to receive an effective rate of return of between 7.2% and 8.3%, and investors supporting the £480,000 Oakapple project are expected to get a rate of 7.3% to 8.6%.
Chairman for Oakapple Group, Phil Taylor, added crowdfunding helped the firm because it financed smaller sustainable projects which would otherwise have struggled to attract the interest of major lenders.
Taylor told Wealth Manager: ‘There’s more flexibility. The lot size that we can raise through crowdfunding is smaller and fits nicely into a niche that the banks don’t seem to be interested in.’
The firms' successful fundraising follows seasoned City investor Nicola Horlick turning to crowdfunding to attract seed capital for her next venture, a fund investing in Hollywood movies.
Investors could commit as little as £10 and Horlick raised £150,000 in just over 20 days.
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