Innovative new fund to invest in solar residential projects

Solar Asset Partners announces the launch of their unique new fund that intends to invest in residential solar projects in the South of England. The Fund will derive its returns from Feed-In-Tariffs (FITs) introduced by the UK Government on 1 April 2010.

The Fund will invest in retrofit 4kW residential solar PV projects and therefore qualify for the highest FITs (41.3p/kWh) following a recent Government announcement to restrict renewable energy tariffs available to larger projects.

The fund offers the chance to invest in 25 year index-linked solar tariffs with significant capital growth potential targeting a rate of return of 25% after two years, 20% over three years, or 15% after 5 years.

It is important to remember that feed in tariffs (FITs) will be considered an excluded activity for EIS and VCTs from 6 April 2012.  VCTs and EISs currently raising funds must be generating electricity commercially by 6 April 2012.

Therefore unless funds are in place now and are being used to for large scale commercial energy generation by 5/4/2012 there are likely to be difficulties after the end of this tax year. 

It is unlikely that funds will be raising money beyond September 2011 as they will require at least six months to get the investment agreed.  Most IFAs are steering away form this type of investment due to the risks.  Solar Asset Partners is perfectly placed to provide opportunities for investment in FITs with the associated tax relief(s).

The structure of the fund’s partnerships means that investors should be able to claim Annual Investment Allowance (AIA) for up to £100,000 in qualifying plant & machinery.

Investors will be limited to a maximum investment of £25,000, on which they should receive loss relief of £11,761 or put another way, an attractive 47% of income tax relief for a higher rate 50% tax payer. Solar Asset Partners has ambitious plans for a £10m fund raise with the potential for further innovative funds planned to raise up to in excess of £100m.

The Investment Adviser is underwriting fund costs such that the fund will commence as soon as Solar Asset Partners have raised £100,000 into each limited partnership.

Solar Asset Partners’ property management expertise gives them a clear advantage as they have in place, a sales field force of some 170 agents offering a "rent the roof" scheme which will provide access to thousands of potentially attractive properties.  Solar Asset Partners already has 174 roof tops under option.  Added to this will be properties that may be introduced through estate, managing and letting agents where they have extensive connections.

Solar Asset Partners believes that the Fund should not therefore be subject to the main risks associated with similar funds, which may have problems sourcing and identifying potential suitable sites, or gaining planning permission prior to April 2012.

Solar Asset Partners benefits from a high calibre management and advisory team who share many years of experience in both the renewable energy and property management sectors.  Details of the managements and advisory teams can be found in the Notes to Editors section below.

Chris Phillips, Director commented: “This new Fund represents an exciting opportunity to invest in the fast growing renewable energy market.  Investors, who are higher rate 50% tax payers, should benefit from 47% income tax relief.  At a time when the Chancellor is proposing to cut back on available tax relief for film funds and VCT’s, Feed In Tariffs remain a potentially attractive investment with the added benefit of tax relief that the government has remained firmly committed to.

”It is interesting to note that whilst the initial tax break for EIS is 20% and for VCT's is 30%, Solar Asset Partners Limited Partnership scheme with 47%, offers almost as much initial tax concessions as the other two combined and since this is not an EIS nor a VCT there are no time restrictions on the investor exit route.”