Swindon Solar Park’s Community Share Offer Brightens Up Dismal Summer
With the British summer of 2012 well on track to be the wettest and most sun-free since records began, it’s hard to imagine an investment opportunity in a solar PV farm being snapped up. But that’s apparently what’s happening out Swindon way. Westmill Solar Co-operative Ltd launched in late June an offer for £4 million worth of shares in its solar park at Watchfield, a few miles from Swindon on Wiltshire’s border with Oxfordshire, and as of writing (27 July) some 920 local businesses and residents had committed in excess of £3.5 million. The promoters are confident of reaching the target by the offer’s closing at midnight on 31 July.
According to the company’s website and the offer prospectus, the Westmill Solar Park – consisting of an array of 21,620 panels on 30 acres (12.14 hectares) of land – is already up and running, having been commissioned last year. The minimum subscription is £250, with the maximum set at £20,000. The promoters’ objective with the share offer is stated thus –
>>We now want to raise enough funding to buy the solar park back from the initial investors to create the UK’s first and world’s largest cooperatively run, community-owned solar farm.
!m(/uploads/story/198/thumbs/pic1_inline.png)It’s further revealed that this offering replicates an earlier and successful ‘community’ float of the adjacent Westmill Wind Farm. Both alternative energy enterprises are the creation of local farmer Adam Twine, who farms organically on 190 hectares and on whose land the two projects are located. Essentially, the co-operative will use the funds raised in the offering together with bank finance to purchase the solar park from Mr Twine for £15 million.
The key selling point with this innovative float is that it affords the opportunity for “community ownership of one of the UK’s few large scale solar power plants”. Indeed, the promoters believe that, once the float has been consummated, Westmill Solar Park will be “the largest community-owned solar farm in the world”. Although open to the public at large, the offer is said in the prospectus to be “prioritised for residents living close to the Site”. The company which will end up owning the solar park is structured as a co-operative “owned by and managed for the benefit of its Members” – of course the same could be said of any proprietary company but a difference here is that each member will have only one shareholder vote, regardless of their stake in the company.
The notion of communal ownership of a green energy project has doubtless been a motivating factor for many of the subscribers. But of course collective ownership does not guarantee the success of a venture, however laudable the objective. Underpinning the Westmill Solar Park float is the feed-in tariff (FiT) scheme operated by the UK government for green energy generation, which provides a guaranteed price per kilowatt/hour for 25 years or the life of the project, whichever comes first. From 1 August last year, following a review of the scheme in relation to solar, the government drastically reduced the FiT from over 32 pence to just 8.2 pence/kWh. But, the prospectus advises, the Westmill Solar Park project managed to bring itself on stream ahead of the deadline and so will receive the old tariff.
Even with a guaranteed off-take price, this project is no get-rich-quick scheme. Investors are cautioned that they will need to be in for the long haul, with the projected 9-11 percent internal rate of return being computed over the 24 remaining years of the FiT. But for Swindon-domiciled citizens and corporates seeking to invest in a tangible expression of their green inclinations, the Westmill Solar Park offer seems to be just the ticket.
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