The Solar Digest for Solar Power, Solar Energy and Photovoltaic PV News - Installation
£10 Million Solar Loan for Sunderland Social Housing
- Published: Thursday, 03 April 2014 12:24
Empower Community announced this morning that a large UK institutional pension investor has loaned £10.1m to a project providing free daytime solar energy to over 2300 of Gentoo Group's customers' homes in Sunderland.
The amortising 20 year loan will provide investors with an inflation-linked annual return. Profits from the deal will be reinvested in the local Sunderland community.
Empower Community will use the funds to acquire and manage existing solar photovoltaic installations on 2327 Gentoo social homes and 6 corporate buildings in the Sunderland area. It will continue to provide thousands of tenants with access to free daytime energy, which can reduce bills by up to 40% and will reduce carbon emissions with clean solar energy. With the refinancing of Gentoo's solar panels, Gentoo plans to roll out PV panels to an additional 3000 homes in Sunderland.
Empower Community Management's Alex Grayson says "The beauty of this deal is that everybody's interests are aligned: the investor makes solid financial returns, with measurable social and environmental impact; tenants enjoy access to free daytime power, which helps them escape fuel poverty; Gentoo enjoys an ongoing return and financing to continue their exciting developments and the community receives funding for local initiatives from the profits."
Peter Walls, Chief Executive, Gentoo Group said: "We're always looking for new ways to make a positive difference and influence change - this innovative deal with Empower Community does just that. Fuel poverty is a genuine concern with rising energy costs - 'heat or eat' is a reality that many vulnerable individuals in our society are now facing. This is a unique way to deliver more solar solutions to our customers, at no cost, with the additional benefits that the local community fund will bring."
Since the introduction of the Feed-in Tariff in 2010, despite some reviews along the way, the stable, long-term and index-linked nature of revenues from these projects have been attracting increasing interest from the UK institutional investment markets, but this is the first at-scale 'balanced stakeholder' model to arrive.
Minister for Civil Society Nick Hurd said: “The benefits of this project are threefold: tenants get access to free daytime power, the housing association gets the finance to install solar panels in more social housing and the profits of the deal are reinvested back into the community. “The £100,000 worth of support from our Investment and Contract Readiness Fund has enabled this impressive organisation to go on and raise over £10m through a bond. I look forward to seeing this model replicated across the country with housing associations, schools, hospitals all benefiting from access to free day time energy.”
"It's all about efficiency." says Empower Community's Bob Knowles, "If you can create a scalable structure which directly matches project revenues with investor requirements, everybody wins."
Social Finance, the leading social investment intermediary, advised Empower Community and placed the deal. Martin Rich, Sales Director, said that "this is the first large-scale, socially-focused investment into solar energy for social housing. We are delighted that institutional investors can see the value of investing for social good whilst still achieving market rate returns."