Cheltenham company launches £3 million crowdfunding to accelerate ground source heat pump adoption
Renewable Heat Holdings Limited, one of the UK’s largest owner-operators of ground source heat pump systems, is seeking to raise a total of £3 million in crowdfunding investment via Triodos Bank to accelerate the installation of ground source heat pumps in the UK – an important step in helping to lower the country’s carbon emissions.
Currently, 78 per cent of energy used to heat buildings is powered by gas. The transition to low energy heating remains significantly behind renewable electricity generation in the UK and is central to the plan to reach net zero. RHHL’s ground source heat pumps replace traditional gas boilers, with all of its existing systems having been installed in new-build retirement homes.
Established in 2013, RHHL owns and operates more than 70 projects with a combined capacity of 11.55 MW, generating more than 17,000 MWh of renewable heat per year. RHHL generates income through payments under the government’s Renewable Heat Incentive (RHI) scheme for each of the projects. The RHI payments are guaranteed for a 20-year period and are index-linked to protect against inflation.
Cheltenham-based RHHL (previously Rendesco Holdings Ltd) retains ownership of the entire renewable heat system and leases the client’s plant room for 20 years. The company is responsible for maintaining and servicing the heat pump system during this period and ensuring the system provides heat and hot water to the client’s building. At the end of the 20-year lease, the entire heat pump system passes to the client. Residents receive hot water and heating and pay only for the electricity to power the pumps.
RHHL previously raised crowdfunding investment in 2018 through Triodos Bank UK, as well as receiving a loan from the sustainable bank. This funded more than 50 heat pump installations in new-build retirement homes. Due to the company’s growth and future ambitions, it’s repaying its initial bond and now raising new capital to position it for the next phase of its growth. Existing bondholders have had the opportunity to roll over their investment in the new bond, therefore the company is well on its way to raising the £3 million total new bond investment they require in total.
The seven-year bond will pay investors five per cent gross interest per year, with a minimum investment of £50. As with all investments, interest payments and return of capital are not guaranteed.
The UK Government has announced two significant regulatory changes that will increase the uptake of heat pumps. The most significant for RHHL is that from 2025 gas boilers will be banned in new homes which must then be built with low-carbon heating systems and high levels of energy efficiency. This regulation creates a significant opportunity for the company as a leader in the design and installation of heat pumps. RHHL is exploring working with a range of clients for future work, both current and new.
Alastair Murray, director and founder of RHHL, said: “Low-carbon heating is critical to the fight against climate change and with the UK Government supporting this energy transition through regulatory changes we are focused on how we can support its implementation. Triodos crowdfunding investors can be a part of this journey with us, supporting our desire to change the way homes are heated that helps to protect the planet and its people.”
Richard O’Brien, corporate finance manager at Triodos Bank UK, added: “It’s been exciting to see the success RHHL has achieved in the last couple of years, and they are well positioned to be at the forefront of this energy transition. We’re really pleased to offer our investors the opportunity to support such a company in its ambitions and to help to reduce the UK’s carbon emissions, which all help in the road towards net zero.”
The bond is available within the tax-efficient Innovative Finance ISA (IFISA) wrapper. Like all ISAs, the IFISA is subject to eligibility criteria and ISA eligibility does not guarantee returns or protect consumers from losing their money.