UK's first green energy ISA attracts £1m funding pool
The UK's first green energy Individual Savings Account (ISA) has already received £1m of investment since its launch last week, with the expenditure set to fund a new community solar farm in Swindon.
The green energy ISA from peer-to-peer investment company Abundance was launched last Monday with a Thrive Renewables Bond being promoted by Triodos.
The £1m in ISA funds so far can be accounted for by the Thrive Bond (£700k), and a second Swindon solar bond (£300k), which opened on Friday after the UK's first ever council solar bond raised £1.8m over the summer.
The Swindon solar bond will give an average annual 6% rate of return for a 20-year period, with a £5 minimum investment offer.
Secretary of State for Communities and Local Government Sajid Javid said: “This is an excellent example of a local council working with the private sector to provide local people with a means of investing in their local community and its infrastructure. I wish it every success.”
Making a difference
The fund enables people to make a direct, tax-free investment in the council-owned 5MW solar farm at Chapel Farm in Blunsdon, Swindon.
Swindon Borough Council will provide £3m of the solar farm investment, leaving the remaining money to be raised by investors via Abundance. The farm will take Swindon Council to 80% of its target to install 200MW of renewable capacity by 2020, the equivalent of meeting the electricity requirements of every home in the borough.
Abundance co-founder and joint managing director Bruce Davis said: “We want to turn investing in ISAs from something gathering dust in the forgotten corner of a bank or riding the roller coaster of global stock markets into something that makes a difference in the real world. Investors’ money will be working harder than it would in the bank, boosting the UK’s green economy and sustainable infrastructure, and returns will be tax-free.
“Our second Swindon solar bond is just the start – we’ve got other exciting ISA investments which can help ordinary people match their financial aspirations with their environmental values.”
Bond, green bond
Green bonds are becoming a popular method to boost renewable project uptake. Both ING and HSBC have injected more than £1bn each into Green Bond portfolios as banks begin to embrace a new era of green finance.
Last month, UK green energy supplier Ecotricity continued to expand its influence in the renewable energy sector with the launch of its fourth "Ecobond".
Moody's Investors Service recently found that global green bonds volume reached another peak during the three months ending in September, with the strongest quarterly issuance yet of £20.1bn, while the amount for all of 2016 could rise to around $64bn.