The Alternate Energies portfolio comprises over 300 residential solar installations on social housing in Colchester, which Downing is seeking to take over for £2.7m. Image: Downing.

Investment specialist Downing has launched its latest crowd bond seeking to raise £2.7 million for the refinancing of a residential solar portfolio in Colchester.

Alternate Energies (AE), a scheme made up of over 300 roof mounted PV installations, was developed on social housing owned by Colchester Borough Council and has an installed capacity of 1MWp, generating 900MWh a year. Downing, which managed funds used to invest in the scheme in 2011, is seeking to replace the capital of existing and more expensive debt used for AE.

Where crowdfunding has traditionally been associated with high risk investment, leaving investors empty-handed if unsuccessful, Downing says it is offering asset-back bonds that provide less risk. The project is said to have a consistent record of performance and can offer early investors a return of 5.25% over the 12 month period of the scheme.

Julia Groves, head of crowdfunding at Downing and formerly of Trillion Fund, said: “Having worked with AE for a number of years, we have a high level of knowledge of the asset and how it has performed. This provides a good degree of confidence that the investment will deliver returns in line with expectations, however, this is not guaranteed.

“Renewable energy can represent a way of producing stable income through the generation and sale of renewable electricity to the grid, together with government-backed incentives – in this case feed-in-tariffs (FiTs).”

Downing stands to make around £450,000 per year over the remaining 20 years of the portfolio through feed-in tariff revenue.

Groves concluded: “We have been investing in renewable energy projects since 2010 and believe that these Crowd Bonds offer attractive risk-adjusted returns for investors and provide competitive finance for growing UK businesses focussed on developing clean technology.

“The appeal for people to invest their money in environmentally-friendly ventures is also increasing. Feedback from a survey conducted among Downing Crowd investors revealed that while respondents primary concern was the level of return offered, almost a quarter of those surveyed cited the attraction of improving alternative energy sources as the main driver behind their investment.”

Interested investors have until 5pm on 14 October to secure the higher rate of return, while those committing to the crowd bond after this date will be offered 4.75%.