Money Matters

Your Investment

The share offer will set a minimum and maximum investment level. The minimum is £100 and the maximum £10,000.  This is confirmed in the share offer document. The total share offer is set at £ 60,000.

We expect that all investments will receive a return of at least 4% interest per annum.  The first interest payment will be at a minimum of 12 months after installation.

Please note that our figures are provisional. Your investment is subject to risk and the  return on your investment could go down.   It is important to read the risk factors further below.

How Long Do I Need to Invest For?

The shares are not tradable but it will be possible to withdraw your capital at a rate of 5% per year; greater amounts would be subject to a notice period and the approval of the Board of the society.  The decision as to whether to allow capital withdrawal depends upon whether the community benefit society is making the returns forecast in its business plan projections.

The community benefit society will run each project for 20 years which is the length of time the feed in tariff will apply to our solar sites.

Inheritance Tax Relief

Shares would generally be expected to attract Business Property Relief at rates of up to 100% for IHT purposes, provided the shares have been held for at least 2 years.

Community Benefit Society Income

We expect to generate and sell electricity that will be produced by solar PV renewable technology. This means there will be two income streams: one based on the Feed in Tariff  (index-linked to the  RPI - Retail Price Index) and one based on income through electricity sales to our host sites (also linked to RPI).  While excess electricity will be fed to the National Grid, we do not plan to  install export meters, as we expect the schools to use the vast majority of electricity produced.

Community Benefit Society-  Outgoings

After the installation of the panels, the greatest costs will be interest payments and potential capital repayment to members. Other costs include running expenses such as maintenance, insurance and an inverter replacement fund. There will be income above this level and that will go to a Community Benefit Fund for local insulation and other energy-saving schemes.

Assumptions In our projections

We have made the following assumptions:

  • Performance degradation 1% pa. This is a normal degradation rate for solar PV.   Retail Price Index (RPI), currently  0.1%, has been estimated at 2.5% p.a. over the 20 year period as it may, during the life of the project, be much higher if medium–to long-term historic trends are followed.
  • Interest payments to members are expected to be at least 4% paid annually. The maximum we are allowed to pay as a Community Benefit Society is 5%.
  • Insurance figures are based on quotes received
  • Administration costs and running costs are estimates
  • Projections are based on the project securing Feed in Tariff appropriate to the different sizes of systems. For QPCS  this is currently pre-registered at 11.7 pence per kWh

Risks:

Feed in Tariff Reductions Up to September 30th 2015 DECC allowed community energy projects to lock in a feed in tari­ff rate for up to 12 months. We have been able to do this and guarantee the current rate (11.7 p/kWh), RPI linked, for the 20 year period of the FIT. Our 12 month period began at the end of  September  2015. We are confident we can complete installation and register for the FIT in time.  In the unlikely event this is not achieved, investors' money will be returned. 

1. General investment risks

The value of shares is fixed at £1 per share. Off­er shares will not be transferable or traded on a recognised stock exchange, but only buyable back by Brent Pure Energy.

2. Risks associated with the assumptions

The RPI and cost increase rates are variable and unpredictable. FiT is linked to the RPI, but so, directly and indirectly, are some of the costs, therefore variance within recent RPI ranges will not have a major impact on profit. Energy cost inflation may prove to be more volatile; it is expected to rise ahead of inflation on average but will probably do so in an irregular fashion. In the last decade, electricity prices have risen by an average of 8% per annum. If this trend continues, the schools will benefit increasingly. Revenue may surge ahead of projections in the short term but fall back to trend later, or vice versa; alternative energy sources might in the long run reduce energy cost in real terms and so reverse recent inflationary trends and erode profit. The Board will need to review actual revenue and developing trends before making interest payments or allocating funds to the Community Benefit fund. In order of priority, income goes to PV maintenance and insurance, capital repayment fund, investor interest, then Community Benefit Fund.

3. Risks specific to Brent Pure Energy

Warranties and insurances will be in place in the event of mechanical or electrical breakdown of the equipment. Complete failure and loss of revenue through breakdown is reduced through the use of multiple inverters and the system will be monitored and managed to minimise interruptions to supply. Accidental and malicious damage will also be covered under insurance and public liability insurance.  BPE will take out Directors and Officers Insurance.

4. Renewable energy industry risks

Government policy towards renewable energy may change, although long-term commitments relating to the FiT make this unlikely, since FiTs are part of primary legislation and thus difficult to change. Throughout the operation of the FiT the Government has maintained the commitment to the process of ‘grandfathering’ which ensures that whatever tariff a project is registered for at the commencement of operation, the tariff will remain the same for the duration of the FiT period, (20 years in the case of this project). This payment will also be linked to the Retail Price Index. Projections are based on current FiT rates on the assumption that we are able to comply with preliminary registration through Ofgem regulations. The Board is unable to guarantee that this will be possible so a lower FiT rate may apply. Any changes that threaten the projected financial viability before the end of the share issue would result in the Co-operative returning funds received from prospective members at the end of the Share Offer period.

Disclaimer: Nothing in the wording of this website constitutes an offer or contract. The financial information is provisional and is provided for illustrative purposes only.  Anyone interested in investing in the society will need to read the share offer which will provide full and definitive details of the investment offer. The share offer document will be available for download from this website in April.