The first-of-its-kind platform allows people to directly buy a share of a renewables project like a wind turbine or solar farm. With a minimum investment of £25, any returns go straight into the investor’s pocket as there are no fees and it is free to join.
The move makes Octopus the first energy company in the UK with a retail investment platform regulated by the Financial Conduct Authority (FCA).
It comes as a recent YouGov survey reveals 1 in 3 (33 percent) British people want to invest in green power – and ‘the Collective’ is Octopus’ answer to this call.
The user-friendly platform launches with two wind turbines in Yorkshire and Wales, with plans for several more renewables projects across the country. These turbines are part of Octopus’ pioneering and popular ‘Fan Club’ scheme where customers nearby enjoy discounted electricity when it’s windy.
With a new generation of investors in mind, these turbines offer an annual target return of up to 6 percent with an investment term of three years. To provide additional benefit for those taking part in these first projects on ‘the Collective’, Octopus is underwriting initial investments made in these turbines.
Collective members who invest £1,000 would own approximately 0.05 percent of a turbine – and could get a 6 percent annual return with any dividends paid each quarter, totalling £180 over three years. However, as with any investment, capital is at risk and returns aren’t guaranteed.
Collective members will be able to monitor any returns they earn as well as the clean energy generated from the project in their Collective account. Octopus Energy customers also have the option of linking potential dividends to their energy accounts to reduce their bills.
At the end of the three years, the project aims to buy back the shares at the original price paid – and Collective members can withdraw this or reinvest it in other clean energy projects on the platform.
“Moving to renewable energy represents one of the biggest investment opportunities of our generation – and people can play a powerful role in driving it” said Zoisa North-Bond, CEO of Octopus Energy Collective. “We know our customers and lots of people want to do more than use green energy, they want to own a piece of it and turbocharge the shift to a cheaper energy system.We’re at the start of a people-powered renewables revolution – and ‘the Collective’ platform is bringing green energy ownership to the many, not the few. It’s time for more people to have the chance to take a stake in their clean energy future.”
Investments are subject to tax and will depend on people’s tax circumstances, as people may need to pay tax on any dividend payments.
As part of the sign-up process to become a member of ‘the Collective’, people will need to complete a multi-choice quiz to understand the type of investor they are. These steps help ensure they understand the risks involved with investing and if it’s the right decision for them.
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