Crowdfunding: Over-60s deemed ‘champions’ of renewable energy
Investment in small and medium-scale renewable energy through crowdfunding is particularly appealing to the older generation, analysis of lenders has shown.
Trillion Fund analysed more than 300 lenders that have participated in funding wind projects through the platform which revealed a third of them to be over 61.
Almost half of all funds raised (49%) have come from this age group, with older lenders individually investing more than twice as much as younger lenders.
Trillion Fund said this was to be expected given older people have typically accumulated more in savings and investments than younger generations.
The investment is thought to appeal to this generation as it provides a lower-risk investment than equity crowdfunding, and is only expected to increase following the introductions of new pension freedoms.
“You might expect crowdfunding to be the investment choice of a younger generation,” Trillion Fund chief executive Julia Groves said: “But our research suggests that the silver pound have ended up becoming the unlikely champions of crowd lending.”
“Peer-to-peer loans to renewable energy also offer alternative income, making them particularly attractive to older people who prefer income-based returns, rather than capital growth.
“Wind and solar projects may also appeal to this demographic because they are tangible assets, producing something real and making revenue in an easily understandable way.”
Supporting Local Business
Trillion Fund has raised £2.5m for small-scale clean energy projects in the last 10 months. The turbines are single installations in rural locations that power a farm or business park, enabling local businesses to thrive.
The group’s first raise, E2 Energy, a £1.25m loan secured against operational wind turbines and used to build five more, was over-subscribed and closed six weeks early in August last year.
A second raise will be secured against a maximum of 10 operational wind turbines located across the UK that are owned by E5 Energy, a venture set up by Endurance Wind Power, a leading manufacturer of small and mid-size wind turbines.
The initiative means that local communities are able to reap financial rewards from small, single turbines, and are supporting local businesses in the process.
Endurance Wind Power vice president of commercial Brett Pingree said: “Wind projects have some unique characteristics that make them a particularly suitable asset class for generating a steady retirement income, especially since the subsidy-based portion of the returns are fixed for 20 years.”
Funding sustainability at Sustainability Live
‘Funding sustainability’ will be discussed during a finance-focused session the high-level Conference at Sustainability Live 2015 in April.