Octopus Energy, the UK’s largest energy supplier, has launched an investment platform allowing consumers to buy shares of a renewable energy project.
Octopus has launched ‘the Collective’ which it says is a first-of-its-kind initiative that enables customers to invest in renewables themselves. There is a minimum investment requirement of £25 but, since there are no fees and the Collective is free to join, all returns go to the investor.
A YouGov survey revealed that 33% of Brits want to invest in green power; Octopus says that by becoming the first energy company in the UK with a retail investment platform regulated by the Financial Conduct Authority (FCA), it will meet this demand.
The investment platform has launched with two wind turbines in Yorkshire and Wales—both sites are part of Octopus’ ‘Fan Club’ scheme, which notifies users local to wind generation plants when turbines are active and rewards them for scheduling energy-intensive activities during these periods.
The turbines, in Halifax and Caerphilly, offer an annual target return of up to 6% with an investment term of three years. Octopus will underwrite initial investments in the two wind farms to encourage involvement. It plans to add “several” more renewables projects across the UK to the platform.
Collective members can monitor returns and the clean energy generated from a project and Octopus Energy customers can link potential dividends to their energy accounts to reduce bills.
At the end of three years, the project aims to buy back the shares in the initial two wind farms at the original price paid. Collective members can withdraw this or reinvest it in other clean energy projects on the platform.
Zoisa North-Bond, CEO of the newly launched Octopus Energy Collective said: “Moving to renewable energy represents one of the biggest investment opportunities of our generation – and people can play a powerful role in driving it.
“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.”
Community energy comparison
Octopus’ Collective is not a new idea—the community energy model has seen installation of upwards of 398MW capacity across the UK, with the sector seeing £43.2 million turnover in 2023.
The community energy model has run for over a decade, seeing members of a community invest in renewable energy generation projects and receive interest on their investment from the money the energy co-op makes from selling the power these resources generate.
Octopus’ platform is different in that it opens projects to investment from anywhere in the country, so is not localised or, as such, ‘community’ led.
In March 2022, Ripple Energy energised the UK’s first consumer-owned renewable generation site, a single wind turbine dubbed Graig Fatha, located in Coedely, South Wales. The model is similar to the Collective: individuals buy shares in a renewable energy generation site for a minimum of £25, the profit from which translates to energy bill savings.
The community ownership model for new generation sites also eases the planning approval process. Ripple CEO Sarah Merrick previously explained to Current±: “If a developer can say they want to build a wind farm or a solar park in your local area, and they will enable you to own part of the site, it completely shifts the view of local communities.
“At the moment, there’s not really any incentive to want a wind farm or a solar park built near you, which means there’s a bigger push from local communities for smaller, less ‘disruptive’ renewable generation sites. But if that renewable generation site is going to be owned by the community, they’ll want it to be the best wind or solar farm it can be.”
