RAM and Goldfield follow up solar EIS
RAM Capital and Goldfield Partners have introduced a follow-up to the Goldfield Solar enterprise investment scheme, which closed in December having reached its £10m subscription target.
Sunlight Technologies gives investors who may have missed out on the initial solar EIS another bite of the cherry before April, after which it will no longer be possible to offer this type of EIS.
The new EIS invests in solar power through feed-in tariffs, which are Government incentives for individuals and companies to generate their own electricity using renewable energy such as solar power. They provide a fixed payment for each unit of electricity generated for 20 to 25 years, providing a predictable, long-term inflation-protected revenue stream for investors. But from April, FITs will be ineligible for EIS tax relief. This follows a Government review on the back of concerns that firms were creating solar farms, exploiting subsidies in a way that was not intended.
In keeping with the original purpose of FITs, sunlight technologies invests only in solar panels that are already installed in residential properties through an agreement with A Shade Greener, an installer of solar panels to homes in and around Yorkshire. These systems were installed before December 12, 2011, which is the cut-off date for the highest tariffs. They are totally unaffected by the Government review and the recent legal proceedings over proposed cuts to future FITs payments.
The focus on existing solar panels minimises risks and benefits from higher tariffs than solar panels on new properties, so investor demand may be high because there will be no further opportunities to invest after April. However, returns are dependent entirely on the performance of the solar investments, which is not guaranteed.