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The country's first "wood fuel co-operative" is offering green-minded small investors the chance to watch their money go up in smoke and still earn a decent return.
Woolhope Woodheat is a "groundbreaking" project that aims to bring green heat to Herefordshire by installing woodchip boilers in larger buildings that are expensive to run, and sourcing the fuel from local, sustainable woodlands. It is inviting members of the public to join the co-op by investing a minimum of £250, and says the projected return on your investment averages out at 6.1% or more, provided you are happy to sign up for the long term.
If that doesn't appeal, how about helping to finance a scheme to re-establish an iconic Yorkshire building as a major music venue, or supporting ventures that aim to install solar panels on buildings in Brighton and Bristol?
These are among a number of community initiatives open to small investors who sympathise with the cause, but are also looking for a return on their money. Others include a pub in York and a shop on Shetland.
Community owned and run local businesses are becoming increasingly common. In villages, towns and cities across the UK, people are being invited to become members of "community co-operatives" that typically aim to generate renewable energy or bring vital amenities back to life. Often there is an opportunity for people to invest in these schemes by buying shares or "loan stock" (which means you lend the co-op money for a set period).
Guardian Money has featured a number of these initiatives over the last year or so, such as the Butchers Arms pub in Crosby Ravensworth, Cumbria, which reopened in August 2011; Clevedon Community Bookshop in Clevedon, North Somerset, which opened for business in December 2011; and The Drive housing co-operative in Walthamstow, north-east London, which we featured in July 2011.
Woolhope Woodheat – or Woolhope Dome Community Woodfuel Co-operative Limited, to give it its full name – which is based in Hereford, claims to be unique in the way it ties together green energy with rescuing woodland from neglect. It says many large buildings in south Herefordshire are heated with oil or LPG, which is a "costly and unsustainable situation".
It plans to install low-emission woodchip boilers in properties that are currently heated with fossil fuels. These boilers will be owned and operated by the co-op, and the customers pay for the heat used. At the same time, the co-op will build up its own woodchip supply.
Woolhope Woodheat plans to install its first boiler at Canon Frome Court, a community of about 50 people living in a Georgian manor and 40-acre organic farm in Herefordshire.
According to the share offer document, the co-op will generate money from the sale of heat, and also receive income from the government's Renewable Heat Incentive scheme, which will enable it to pay interest to members and return their original investment at the end of the investment period. The co-op wants to raise £324,000 to get the project under way, and people can buy a minimum of 250 shares at £1 each.
With this scheme, you need to be in for the long term, as the investment period is likely to be 20 years, and the highest returns look set to be delivered in the final 10. The predicted return over the full period is 6.1%, though the co-op says the effective return for those investing £500-plus who claim Enterprise Investment Scheme (EIS) tax relief, could be 8.7%.
The offer is due to end on 13 July.
There are plenty of other schemes open to investors:
• Brighton Energy Co-operative is raising money to install solar photovoltaic (PV) systems on four buildings in the Brighton area, including St George's Church in Kemptown and CityCoast Church in Portslade. It has raised around 75% of the £200,000 sought, and intends to pay a return to members of "an expected 4%" from 1 July 2015. The co-op adds: "We expect this to increase in subsequent years due to inflation." Again, investors may qualify for EIS tax relief.
Minimum investment: £400; maximum: £20,000. Deadline for applications, 2 July.
• Meanwhile the Bristol Energy Cooperative aims to install solar panels on community buildings in the city. Its initial share offer was oversubscribed – the minimum investment was £50, and the aim is to deliver a return of up to 4% a year – but it is keeping the offer open while it explores the feasibility of installing panels on other buildings.
It will initially concentrate on two sites: Hamilton House in Stokes Croft, a community arts facility, and Knowle West Media Centre, a media and arts charity.
• You can invest in a co-operative formed to help finance the restoration and regeneration of Unity Hall in Wakefield, which, during its lifetime, has hosted everything from silent movies to gigs by Bauhaus, Captain Beefheart, the Human League and Iron Maiden, among others. Those who have backed the project include rock band the Cribs. The plan is to turn Unity Hall into a music, theatre and arts venue with conference facilities and office space.
Minimum investment is £200, and the share prospectus states that interest of 6% will be paid from year three of trading.
• A community share issue is set to launch on 2 July with the aim of buying the lease of the Golden Ball pub in York and bringing it into community ownership. Information will be available at goldenballyork.co.uk
• Today sees the official re-opening of one of the British Isles's most remote convenience stores. The re-named Bigton Community Shop, on mainland Shetland, has been saved following a recent share issue. A Co-operative Group spokesman told Money that a share issue had attracted 110 members investing from £50, and that shares were still available. For more information check out the Bigton Community Enterprise Facebook page.
Most of these share issues were launched with support from the Co-operative Enterprise Hub, which has been set up by the Co-operative Group as a one-stop shop for free advice, training and access to finance. It has pledged a further £6m between 2012-14 to develop the service.
Comments
23 June 2012 9:38PM
This is the first time I've seen this feature on the Gauniard - is it new?
A picture of a shire horse gathering firewood - hmm. That's an "investment" that's going to show a good return yes?
Nobody but nobody knows what the energy landscape is going to be in 20 years - but the co-op reckons you'll get a 6.1% return on a scheme depending on a wood burning generators.
Ok - what else have you got? Bristol Energy Co-op hoping to get 4% on solar panels. But I can get a risk free return on a 3 year bond at 3.6% from moneysupermarket.
A community shop in Shetland? In trying to turn a profit the Post Office has been closing such places down for many many years.
If you've got so much money that you can afford to spunk some on these daft schemes then I'm chuffed for you - but let's not claim that they are "investments".
What utter bollocks.
24 June 2012 8:43AM
Ethical investment has to be the way forward if we are serious about changing an investment system which is seriously flawed. Local schemes such as Woolhope Woodhead are good at bringing together local communities and businesses to harness resources in a sustainable way. Hats off to those who are pressing forward with this project. Not only will it create jobs in Herefordshire but will also improve the wooded landscape/wildlife. I, for one, see this as an investment (social and financial) worth pursuing.
24 June 2012 4:57PM
Great to see Brighton Energy Coop mentioned here - they've been doing a great job down here in Sussex, installing the county' largest solar scheme at Shoreham - http://www.brightonenergy.org.uk/2012/06/panels-live-at-shoreham-port-2-weeks-of-share-offer-to-go/ - and promoting renewables.