A Sydney company has launched a $20 million clean energy fund that will provide Power Purchase Agreements to small and medium solar energy generation projects – seizing an investment opportunity that has so far been overlooked in the Australian renewables market.
The fund went live this week, under the management of boutique fund manager Clean Energy Crowd – a group of ex-institutional bankers and fund managers who are keen to accelerate the uptake of renewable energy in Australia.
Matthew Glendinning, a co-founder and director of the group, said the Solar Clean Energy Fund No.1 was developed specifically to address the lack of investment in Australia’s commercial solar space, due to the protracted RET review.
“We’re targeting the commercial solar market, which is currently at only about 3-4 per cent of penetration,” Glendinning told RenewEconomy in an interview. “That’s a large market for solar to be useful.”
The fund’s main target will be small to medium business, keen to install solar systems up to 100kW.
“We want to reduce the up-front cost to commercial customers in going solar,” he said. “So they can go green at no up front cost, but also (get access to) cheaper electricity.”
Glendinning said the company had looked at various funding models, but decided on third-party finance as the most viable.
Now that the fund is live for investment, CEC is hoping to raise the targeted $20 million in the next few months. Glendinning says they will need a minimum of $5 million to go ahead with their plans.
The fund is seeking to attract institutional and “sophisticated” investors – the minimum investment required will be $100,000 – both onshore and offshore.
CEC forecasts year-one income at 35-40 per cent of funds invested with combined income of Small – Scale Technology Certificates (STCs) and solar energy revenue.
“We want to make superannuation funds aware that these are viable investments,” said Glendinning.