Using the power of the community to fund local energy projects

With raising finance for energy projects often being a hard sell for developers, GrowthBusiness meets Abundance Generation to find out how it is revolutionising the process.

Having been part of the founding team at peer-to-peer lending platform Zopa, Bruce Davis decided that there was a gap in the market for a similar thing in the renewable energy sector.

Alongside his fellow founding partners Karl Harder and Louise Wilson, Davis set up Abundance Generation in 2009 before launching it to the public in 2012. The platform has now picked up Deal of the Year at the New Energy & Cleantech Awards 2013 for the first project it got away.

So far it has overseen £2.2 million of funds raised from around 500 investors across its three community energy projects. Its latest project, Hoo Solar, has already hit its minimum target of £270,000 and his now aiming for a total of £385,000.

The concept works by linking communities and individuals with renewable energy projects, making it possible for them to share in the benefits of energy production directly.

Its biggest project to date was its first, a wind turbine in the Forest of Dean. The development was launched in July 2012 by Abundance Generation and went on to raise £1.4 million.

Average investment sizes currently sit at around £1900 per project.  However, in line with its ethos to be opening up renewables investing to a much wider audience, Abundance Generation still has a good number of smaller investors in the £5-£100 bracket who Davis hopes will both become supporters of renewable energy as a viable and sustainable energy source for the UK, and start on the road to making more proactive investments for their future needs. 

Davis says that Abundance Generation is trying to make financing in the renewables space a bit more transparent and democratic, creating a new form of platform which is able to make larger investments in the £1 million to £4 million zone, what he calls the ‘sweet spot’.

Local involvement

Commenting on the standout achievements of the Forest of Dean project, Davis says, ‘First thing is that it is a community wind turbine which is putting upwards of £15,000 into the local community each year.

‘It overcame some challenges in putting it together, now it is able to provide info everyday about its production and people can see in real-time how it is working.’

With Abundance Generation’s first two projects in the Forest of Dean and South Downs serving as proof of concept for potential investors, Davis says that the third, Hoo Solar in Kent, has come off the back of those.

‘We are starting to see more come into our pipeline, similar kinds of deals,’ Davis explains.

‘What we are aiming to do is build some relationships with some bigger developers who want to bring community to their projects without necessarily giving up ownership of it.’

Bank collaboration is another area that Davis would like to see cultivated, and the platform has already begun initial discussions with a number of banks to look at how the two mechanisms could work alongside each other.

Going forward, Abundance Generation’s biggest barrier to scale, Davis says, will be awareness of its products. By offering returns of between 7-8 per cent on investments, Davis believes that the offering is ‘attractive’, it is just a case of ensuring that people understand how it works and how it relates to projects – and that just takes time, he says.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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