Product review: Abundance Generation solar energy investment

Those who want to boost returns and help the environment too might be interested in a new solar energy project from Abundance.

The second of its type, the project aims to pay between 6 and 7.8% pa over the 20-year lifetime of the investment.

By installing solar panels in the South Downs, the project aims to make money from the Government’s feed-in tariff scheme, which pays for energy generated via renewable sources.

Abundance aims to raise between £500,000 and £2m to install the solar panels on homes around the area.

Louise Wilson, cofounder and joint managing director of AbundanceGeneration, said, “What is really needed is… new ways for people to invest, which are accessible to all and are simple and transparent.”

Minimum investment is £5 and 1.9% AMC, though this is taken from returns. Those investing before August 31 get a reduced rate of 1.2%.

www.abundancegeneration.com

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Some will flock to this investment for its green credentials alone, looking to bolster their portfolio with more environmentally-friendly investments. However those looking for returns will not be disappointed, either.

In some ways the investment is quite risky, as it relies on the sun shining and generating enough electricity, the panels not breaking and, initially, the £500,000 threshold for investment being met. And, of course, if the underlying firm fails then investors lose all their money.

However, the feed-in tariff is Government-backed, with the rate being guaranteed for 20 years, providing a solid income. Current rates are 16p per kWh for schemes of up to 4kW, in addition to 4.5p per kWh for electricity not used and exported back to the grid, with RPI-linking each year.

One thing to watch out for is the time between investors pledging money and it being invested by the project. For early entrants it could mean money sits in an HSBC cash account for up to three months earning little or no interest.