What is Brighton Energy Co-operative?
Brighton Energy Co-operative is the trading name of Brighton Energy Limited, a Community Benefit Society registered in England, Registration number: 31107 R.
How does Brighton Energy Co-operative make money?
Brighton Energy Co-operative generates revenue via 1) FIT revenue from each of its sites and 2) selling electricity.
What are the potential financial returns?
Brighton Energy Co-operative intends to pay investors interest of 5% average per annum, commencing a year after installation ends.
Do the financial returns increase over time?
Since the FIT increases annually in line with the Retail Price Index (RPI), we judge that the returns will increase over time. Note, however, that the 5% in the share offer is the average return expected over each of the 20 years of the lifetime of the scheme.
When and how can I take my money out?
Brighton Energy Ltd intends to pay back 5% of the capital raised each year, in addition to dividends. This is expected to take the form of a direct debit to all members, based on the amount they have invested.
BEC shares are not transferable; they may not be sold. Brighton Energy Co-operative directors have the right to change the notice period for withdrawals, or to suspend withdrawals.
Does the value of the shares change?
No, the shares are always worth the same amount, unless the directors decide to write the value down (if the Society gets into financial trouble, for example). We use these type of shares because we are a Community Benefit Society (a form of Industrial and Provident Society) and thus regulated differently to a normal company.
Who will manage the project?
Brighton Energy Co-operative members owns the solar panels and associated equipment. The Brighton Energy Co-operative board manages the installation of the panels and will deal with ongoing maintenance. The board is responsible for authorising payments to shareholders in accordance with the terms set out in the share invite document and in the Rules of the Society.
How do I get involved in Brighton Energy Co-operative’s share invite?
You become a member of Brighton Energy Co-operative by purchasing shares. Each share is worth £1: the minimum you can buy is £400 & the maximum is £20,000. Owning shares means you can participate in BEC’s operation through its “one member, one vote” principle, regardless of how many shares you own. Members will elect the board of directors at the annual general meeting (AGM) on a three-year rotation. All applications are subject to the terms set out in the Rules of the Society.
What happens to my shares if I die?
In the event of the death of a shareholder, the repaid value of the shares will normally be added to the estate for probate purposes. Our application form offers the option (if you so wish) to elect to nominate a recipient for the value of the shares in the event of your death.
Can I hold shares on behalf of children?
Shareholders must be at least 16 years old. You have the option of holding shares on behalf of someone who is under 16, which is set out in the application form.
What is Brighton Energy Co-operative’s revenue from the feed-in-tariff be spent on?
The revenue from the generation, sale, and export of solar electricity is used to:
- pay any maintenance & repairs required for the panels and associated equipment
- pay for the running costs of Brighton Energy Co-operative
- payments into a sinking fund for replacement of the inverters
- fund annual interest payments to investors and capital repayments
- fund low-carbon community projects (see below)
What types of community projects will Brighton Energy Co-operative invest in?
- home-retrofit schemes to help householders reduce energy bills
- awareness-building projects to help the elderly and fuel poor to take advantage of Government and council subsidies that could help reduce energy bills
- school programmes to develop teaching projects looking at renewable energy
- community engagement work to encourage people to adopt low carbon lifestyles
Brighton Energy Co-operative works closely with the council, local community groups and NGOs to ensure that the projects it invests in have the maximum benefit to the city and local communities.
How do we know how much sunshine there will be?
How much sunshine there is will have a bearing on the amount of electricity produced by the solar panels and therefore the revenue generated by the solar panels. The good news is that the amount of sunshine in Brighton & Hove is among the highest in the country — 4.66 hours a day — but of course there’s no guarantee this will remain the same for the next 20 years.
However, we can estimate the likely electrical output of the solar panels, which depends upon latitude and the orientation of the panels, by using Government data on sunshine hours and intensity. This is what installers and developers use, and this is what we have used when making our calculations.
Solar panels’ performance also drops off over time, so in our financial projections we have used the guaranteed degradation rate, which guarantees that the output will be at least 85% of the nameplate figure in 25 years time. In fact, manufacturers expect the actual degradation to be less then 5%. This potential upside will be shared between investors and Brighton Energy Co-operative.
What happens if there is damage to the solar panels?
The panels are covered by insurance, which will cover the cost of replacement for the usual risks, including accidental damage.
Do I get EIS tax relief on any investment?
The EIS scheme ended on the 30th November 2015. Shares issued after this date do not qualify for EIS.
What risks are there?
Brighton Energy Co-operative is a limited liability organisation, and members’ liability is limited to the value of their shareholding. However, you may wish to speak to an Independent Financial Advisor before you become a member and purchase shares, and you should read the share invite document carefully.
The directors have identified the following key risks, which may impact the value of shares:
• BE is unable to raise sufficient capital to develop any renewable energy projects,
• BE is unable to secure planning permissions at suitable sites,
• BE is unable to secure suitable sites ,
• Changes in Government legislation may reduce revenues generated from the Feed-in-Tariff scheme,
• Local weather conditions may affect the amounts of electricity generated,
• Projects may be delayed due to technical, financial or legal matters,
• There may be interruptions to the generation of electricity caused by financial or legal matters which may reduce and/or delay revenues,
• There may be interruptions to generation of electricity caused by mechanical/electrical failure of equipment which may reduce and/or delay revenues,
• There may be a delay in Feed-in-Tariff registration which may delay cash inflow,
• Overhead costs are estimates and may go up or down over time,
• BE may not be able to meet debt repayments due to risk factors above reducing available cash for repayments.
The directors seek to protect against these risks through implementing prudent management practices.
Who should I contact if I’m still unsure?
We’re more than happy to answer your questions. You can contact us here.