Peer to Business Lending
Alternative Finance Sector Report - October 2014 23
PEER TO BUSINESS LENDING
ALTERNATIVE FINANCE SECTOR REPORT
PUBLISHED
November 14
AUTHOR
Luke Jackson
Samantha Goins
RENEWABLE ENERGY
LENDING
Assetz Capital have launched an
innovative automatic investment
account, the Greeen Energy Income
Account, on their platform for
renewable energy projects requiring
loans such as wind turbines.
Renewable energy is any energy
produced from naturally replenished
sources such as sunlight, wind, tidal
and geothermal heat. Renewable
energy investments can be found in
solar pv, wind power, hydro-electric,
anaerobic digestion and biomass.
HOW IT WORKS?
Wind and solar PV are considered
reasonably well tried and tested
technologies that have been in use
for over twenty years. Solar panels
depend upon radiation, not direct
sunlight. They generate DC power
which is converted to AC power.
Location is key, with the best sites in
the UK in the south and west. Wind
turbines generate AC power, with the
best UK sites on high ground with near
constant wind, primarily Scotland and
the west of England and Wales.
WHAT MAKES IT A GOOD
INVESTMENT?
The UK Government is committed
to increasing power from renewable
sources. It has various subsidies to make
the generation of renewable energy
attractive to investors and operators.
The two principal subsidies are
Feed-in Tariffs (FiTs) and Renewable
Obligation Certificates (ROCs).
FITS
FiTs are made up of 2 parts, the
generation tariff and the export
tariff. The generation tariff is paid on
the amount power (kWh) generated
irrespective of whether it is used on
site or exported. The export tariff is
calculated on the power exported to
the National Grid. Generators may
also opt to sell power on the open
market, usually by way of a Power
Purchase Agreement (PPA).
FiTs for both wind and solar are
paid for twenty years from the
commissioning date and are linked
to the Retail Price Index (RPI). Energy
companies are required by law to pay
these, they are recovered by a levy on
all electricity consumers.
ROCS
ROCs are issued by Ofgem to
accredited renewable energy
generators for energy supplied to
customers by a licensed electricity
supplier. It is an obligation on
licensed electricity suppliers to source
electricity from renewable sources.
ROCs are a key component of the
Renewables Obligation, the main
support scheme for renewable
electricity projects in the UK.
