Ripple Energy - is micro ownership of a wind farm worthwhile?

Has anyone analysed the benefits and risks of investing in Ripple Energy. The principle of micro ownership of a wind farm appeals to me. As electricity prices increase, I assume the benefits of this approach increases. Logically generating your own electricity must be more costs effective that buying it for someone else. However, the devil is in the detail, I cannot see a downside to this approach, but have I missed something?

Just my personal opinion but I think it is an excellent scheme. Was gutted to miss out on phase 1. Have paid my reservation for phase 2.

Its a great complement to having solar PV as well - wind tends to be high when solar is low. Its also more credible than green tariffs IMHO as you can say a bit more categorically that you own X kW of a wind farm.

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And is far more accessible than getting solar PV on your roof i.e. much cheaper. Only catch is that atm to get the discount on your bill you have to be with Octopus Energy group supplier or one of their white labels (Co-op , M&S etc)

But they said that they are looking to partner with other suppliers in future (I would assume this is mainly limited by other suppliers ability to do implement the back end necessary to link wind farm output with your power usage).

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It looks like they are to announce other suppliers when they release the next wind farm.

I’m currently with Octopus as I have an ASHP so I use their Go rate. Unfortunately this is being withdrawn apart from electric car owners. They plan to introduce an ASHP rate in April, but there are no details available at the moment.

Hi, I have signed up to the second wind farm. The main risk is the cost of electricity being lower if there is an over supply situation. The price per kwh is at 8p for now. The price is reviewed every year. I think you can sell your share to someone else if you want to leave.

I am in the first Ripple project and looking forward to my bills going down soon.

I think the greatest risk is from possible unfriendly legislation. We have yet to see the government getting behind this kind of thing.

That said, the idea of consumer-owed generation is too important not to support.

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This is my concern. If we could trust good governance, then we’d have a very good regulated market for energy and no one would need to invest in these sorts of schemes, you’d just pay the grid operators.

However, if you don’t trust them, then you have to research and invest in private schemes.

Instead, I wish we could invest in grid level storage capacity to reduce the variability in electrical prices - which is the biggest issue atm. Rather than worry about generation all the time. There are currently no ways to do this.

Personally I’m not concerned about regulatory risk with this, I think issue is counter-party risk mainly around relationships with suppliers. The scheme is setup to repay share capital also through the bill savings so that after 20 years your share capital is repaid. That depends a lot on the relationship between Ripple and these suppliers. If those relationships ended I guess they could revert to a old-style generation investment setup however their corporate form (a bona fide co-op) is then not appropriate and it would raise other issues. I dont know to what extent that is addressed in their current rules.

The 2nd share offer was launched today and they are offering about 1880 £/kW which they estimate results in a yield of 3182 kWh representing a capacity factor of around 36% (which seems reasonable). This then gets translated into some amount off the bill in a (to me) unclear way (but also an estimate as depends on future price of electricity, unknown operational costs etc). It looks like a 2.4% pa return based on their estimate (which seems to be based on historic much lower prices). The bill saving incorporates equity repayment as well so after 20 years you are out which as an investment is more desirable maybe than holding non-withdrawable share capital ?

They say in the prospectus

We estimate the effective rate of return to
be 4.9% over 25 years with a member paying
£1,714 to buy their shares in the co-op receiving
about £125 as savings on their electricity bills a
year.

I cant make sense of that though. Can anyone explain these numbers?

I try not to think about the relative financial returns on the same investment, it’s a weird world out there when you use that lens.

I’d be happy with 2% real. Like a safe bond really. We certainly need more investment in the sector, and if this is one way to make money work honestly, I’m all for it.

Another interesting tidbit from the rules is that the bill saving could be taxable. I assume it could be treated as a capital gain. Its not clear.

Actually its described as trading benefit so maybe its classed as income or trading income…

There are many nuances and the more questions I get answered, the more I have. The supplier seems to get a 2p discount of the retail price and ripple get their commission and it ties you to octopus. However, in principle it seems like a good way to have a reasonably safe green investment where the lower risk results in lower profit. I think I will go for it.

Actually no need to speculate about any of this its all explained in great detail in the share offer document attached
KirkHillShareOffer-2.pdf (3.2 MB)

If anyone wants free £25 added to your account on subscription you can use my referral link: Ripple Energy | Join Ripple (I get £25 as well).

I should stress that all this is my personal opinion as well, Carbon Co-op isnt endorsing this share offer in anyway. Capital at risk blah blah

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I don’t think it’s a big money spinner at a personal level, just seems the right thing to do. I’m in, but befor Ben posted his referral code (sorry). Given my age risk of not getting to 20 yes so good to see it is ‘inheritable’.