Green light for green loans

Despite the increase in Government incentives to promote renewable energy and greater willingness among investors to support the industry, data from the Investment Management Association shows that ethical funds under management only make up a tiny 1.2% of the entire industry.

The value of green investments

Money does make the world go round, and without the right investment, renewable energy simply won’t take off. Ultimately, for many people, the monetary benefit of an investment outweighs any ethical interest - despite the feedback we’ve had from our lenders who often prefer socially responsible, sustainable investments. 

In fact, renewable energy is becoming a good investment. Like them or loathe them, solar panels are popping up on roofs everywhere thanks to subsidies. Similar support has also helped wind turbine operators to set up, with the Government guaranteeing to buy electricity generated by wind turbines at a fixed price.

Obviously, not everyone wants or can afford to add a solar panel to their roof or build a wind farm, but when it comes to their investments, most people at least want to know what their money is being used for.

Green peer-to-peer lending

Research from Triodos Bank suggests that one of the problems with traditional investments is that people don’t understand where their money is going. After all, do you have any idea what your bank uses the money in your savings account for?

Peer-to-peer lending is a more transparent alternative. As an investor you know where your money is going, and its purpose. You can be directly involved in the creation of a new renewable energy source, with an annual return of around 7 per cent before taxes and any defaults that may occur – moral compass and wallet satisfied.

Assetz Capital is the UK’s largest peer-to-peer renewable energy funder, having lent £10 million to fund renewable energy developments in the UK since we launched in March 2013.

Unsurprisingly, the benefits of these loans make them extremely popular:

• The loans are backed by tangible security so should one default, we can use that track record to try to recover lenders’ capital.
• The minimum investment is just £20.
• If you need your money back early, you can sell on loan parts so long as there are other investors to buy them from you.

The growing demand for loans like these with both an ethical and monetary appeal, means that we now offer a specific renewable energy product for our lenders: the Green Energy Income Account.

The Green Energy Income Account

Previously, someone wishing to invest only in renewable energy loans would need to have the time to manually browse through all of the loans and wait for them to be listed before they invested.

However, now investors can put any amount of money into the Green Energy Income Account, which is then automatically invested in any appropriate loans, automatically diversifying and moving money around when more appear, meaning the investor could be funding any number of renewable energy projects at one time, all with a target return of 7% and a provision fund.

We think that products like this will encourage more people to continue to support renewable energy projects, so people can be confident that their investment benefits their bank balance without costing the earth.

If you are interested in green peer-to-peer lending, whether you what to become a borrower or lender, contact Assetz Capital today.

- November 18, 2014