Entrepreneurs to invest £100m in green energy venture

TWO Yorkshire entrepreneurs are planning to invest £100m over the next two years in a new company which aims to become one of the UK’s leading providers of renewable energy generation systems.

Oakapple Renewable Energy (OAREL), launched by Philip Taylor and Gary Douglas, will initially be generating power through the installation of free solar panels but in the longer term aims to develop other forms of renewable energy generation including wind power and anaerobic digestion systems.

The Leeds-based business will target the commercial sector rather than the residential market.

It believes the savings on electricity costs will be biggest for owners of small commercial and industrial premises where daytime usage of electricity is high.

According to managing director Philip Taylor, the company expects to create around 14 jobs and is already committed to invest £20m by March 2012.

“We are already in advanced contract negotiations with a number of well-known businesses and are in discussions with a variety of food processors, hotels, licensed premises, GP surgeries, retail outlets, manufacturing companies, facilities managers and ground rent portfolio landlords,” he said.

He says OAREL is launching at a time when electricity prices are soaring and the Government is committed to sourcing 15% of the UK’s energy requirements from renewable energy sources by 2020.

To meet this target, the Government is incentivising solar panel installations by offering ‘Feed in Tariff’ payments (FITs) for the electricity they generate, which are guaranteed and index linked for the next 25 years. There are also export tariff payments available for any unused electricity that is fed back into the grid.

OAREL has been formed to take advantage of the predicted growth for small-scale solar installations which, according to a report from PricewaterhouseCoopers will increase from 20,000 in 2011 to 680,000 in 2020.

Although businesses and homeowners can choose to invest in the systems themselves and take advantage of both free electricity and FIT payments, the duo believe that many will not want to make the up-front investment or take the risk that the system does not generate the FIT payments anticipated.

OAREL will therefore be paying 100% of capital expenditure for supplying and fitting the solar panels, plus maintenance and insurance for 25 years in return for a roof or land lease over the areas where the panels are mounted.

For the period of the contract customers will have free access to all the electricity generated that they can use, with OAREL receiving the FITs and export tariff income. At the end of the contract customers will continue to benefit from free electricity fed back into the grid.

In addition to targeting the commercial sector, OAREL will also be targeting residential properties and has forecast to be completing more than 500 domestic installations per month in the next two years.

Mr Taylor added: “We are forecasting that within two years the company will have invested around £100m in solar power generation systems and will be completing more than 30 commercial and 500 residential installations every month.

“With a predicted average return on investment of 14%, we are currently in talks with a number of people who have expressed an interest in investing in the company.”

Mr Taylor is the owner of developer Oakapple Group and a former Yorkshire Property Personality of the Year winner, while Gary Douglas is a serial entrepreneur who co-founded the GHD and Jemella hair care businesses.

They are joined by technical director Dave Cockayne who has five years experience of the sector having been involved in a number of solar power schemes in Spain, Italy, Germany and Austria.

The finance director is David Marsh who has worked with Philip Taylor for the last 10 years.

He is also the finance director of Oakapple Group.