£2.5m crowdfunding scheme offers investors green income

For as little as £50, investors can share in the returns of community-scale onshore wind energy through E5 Ltd, a company set up by Yorkshire-based Earthmill – one of the country’s largest turbine installers – in partnership with leading turbine manufacturer Endurance Wind Power and the UK’s biggest social crowdfunding platform, Trillion Fund.

The scheme offers an annual return of 7 per cent over its three-year lifespan, and the companies behind it aim ultimately to raise £2.5m, half of it by April 30.

That may sound ambitious, but the team has a strong track record. In August 2014, they successfully raised £1.25m for E2 Energy, a Yorkshire-based five-turbine scheme.

That loan was oversubscribed, having attracted more than 250 investors, and closed six weeks early, as well as winning “best new entrant” award at the Investment Week awards 2014.

To meet demand, the E5 loan is twice the size and will be used to build up to 10 new community-scale wind turbines, six of which are located around Yorkshire.

Known as “small-scale”, “distributed” or “farm” wind, these turbines do not form part of a large wind farm, but instead are single installations in rural locations that power a single site, such as a farm or business park, offsetting energy costs and generating new revenues that enable local businesses to thrive.

There has already been significant interest in the scheme; 223 people have so far invested close to £1m in E5 energy, 20 of them from Yorkshire.

Robert West, a 56-year-old bio-statistician at the University of Leeds, invested in E5 both to supplement his pension pot once he retires and for the local benefits.

He said: “I have less than 10 years until I retire. My university pension scheme is quite good but I do look for alternatives. I like a variety.

“The thing that is nice with investing in renewables – and I have done it a few times now, is that there are different projects that are financed in different ways. There is a mix of long and short-term loans and investments.

“It isn’t really clear what is happening with interest rates at the moment and people like me are looking for better returns. But for me, this is more of an ethical investment. I have invested in two or three of these, just a little bit at a time.

“One of the fun things for me is the local benefits. I noticed that the turbines in the security and some of those being built were to be located in Yorkshire and Teesside. It does make a bit of a difference. The thrill is that I can drive past them and think ‘that’s one of mine’.”

The E5 loan differs from other peer-to-peer loans because it is asset-backed – secured against up to 10 existing small-scale turbines – so some of the risk of lending is removed.

The returns paid to lenders come from Feed-in Tariffs and electricity prices, which are paid by power companies for the energy the turbines generate.

Steve Milner, managing director of Wetherby-based Earthmill and director of E5 Ltd, said: “There is a growing recognition that the medium-scale individual wind turbines being installed by farmers are a positive addition to the landscape. Not only are they built on a more human scale than wind-farm turbines but they are adding to the power generated by renewables and reducing the UK’s reliance on fossil fuels.”

He added: “Investors who wanted to enter the wind turbine market used to need land, and between £250,000 and £600,000, to buy and install their own turbine. Crowdfunding is a brilliant way of enabling almost anyone who’s interested in wind power to get involved and directly benefit from renewable energy.”

Earthmill, which employs 36 staff, has installed more than 200 wind turbines on farms across the UK. The company was ranked 17th in the 2014 Sunday Times Fast Track 100 list of the UK’s highest-growth companies.