5YJ Co-operative will invest in and operate small scale photo-voltaic (PV) installations throughout the UK.
The investments will typically be in existing projects arranged by professional solar developers. These projects are typically the result of an agreement made between the developer and a property owner, where the developer agrees to install and operate the solar project and, in return, receives a feed in tariff from the utility. The property owner receives free electricity from the installed panels to the home owner and may also receive lease payments from the co-operative.
The home owner - developer - investor model that underpins the business model of 5YJ Co-operative is beneficial to all kinds of home owners because it does not require home owners to finance the installation of solar panels themselves. The financing is handled jointly by the developer and investor, and the more funds are invested through this model the more home owners can start to produce and consume green energy.
The capital invested by 5YJ Co-operative will be from funds raised during the share offer.
5YJ is a co-operative and a non-profit organisation. Therefore, the income from the solar projects will be allocated to promoting clean energy in the UK and to providing a return on investment to the members.
We believe that the partners and stakeholders of 5YJ Co-operative will benefit from our business activities:
Feed in Tariff solar projects typically have a life-span of around 20 years and we use this time frame in our financial model to calculate investment returns for members.
In our calculations we include factors like the average annual energy influx from the sun where each panel is installed, the energy conversion rate of the panel, and a forecasted depreciation of this conversion rate.
The developers from whom 5YJ Co-operative procures the panels will typically be responsible for the actual maintenance of the panels.
The panels are expected to come with a limited performance guarantee from the manufacturer, and will typically also be insured against various forms of deficiencies and weather related events.
The government subsidy (called the Feed-in-Tariff) is what makes solar projects stable and profitable investments. This subsidy guarantees a minimum price on every kWh produced by the solar projects and delivered to the energy grid. The feed-in-tariff is inflation linked, and the tariff is fixed for a 20 year period.
With the amount of energy produced by each PV panel being fairly predictable and a government guaranteed minimum price for each kWh produced, investing in solar has become a safe, reliable and profitable way to plan for the future.
5YJ Co-operative expects to be able to provide investors with an average annual return on investment in excess of 5%. No investment is without risk and, therefore, returns are estimates and cannot be guaranteed. The share offer document has more detail related to the various risks and benefits of investing in 5YJ co-operative.
5YJ Co-operative have received advance assurance to ensure that our shares are eligible for the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) both of which provides investors with certain tax incentives to invest (see www.hmrc.gov.uk/eis/index.htm for further information):
Final approval is only available from HMRC after issuance of shares. Taking into account the SEIS/EIS benefits, we expect that you could obtain up to 50% tax relief on your investment.
Note that any available relief will be reduced should you receive value from the 5YJ Co-operative in the initial 3 year period.
Please seek independent financial advice if you intend to claim relief under the SEIS/EIS as tax treatment depends on your individual circumstances and may also be subject to change in the future.