Solar bonds issued by Swindon Council – the first of their kind in the UK – have sold out a month early, further establishing the town at the forefront of innovation in funding renewable energy projects.
Swindon Community Solar Farm is the UK’s first solar farm funded jointly by a borough council with bonds sold directly to the public.
The offer, structured by London-based peer-to-peer investment platform Abundance, opened on February 24 and was due to close at the end of this month. But it closed this week after reaching its £1.8m target four weeks ahead of schedule.
The funding, along with a £3m cash injection from the council, will be used to build a 5MW solar farm on council-owned land at Common Farm, Wroughton.
Abundance managing director Bruce Davis said the success of the scheme showed infrastructure projects other than solar farms could be funded in a similar way.
“The success of this investment offer has really set a standard for local authorities looking to fund green infrastructure.
“We’ve had lots of inquiries from other councils interested in following Swindon’s pioneering lead. Energy is one area where local authorities have the power to make a difference, engaging and enabling their residents to take positive action and invest in a more sustainable future.
“We’d also like to see them going beyond solar and fund other infrastructure projects this way.”
Cabinet member for transport and sustainability, Cllr Dale Heenan added: “We took a bold decision to create this community solar farm by offering the first council bond direct to the general public in over 100 years.
“It was a calculated risk to raise £1.8m this way, but we knew there was an appetite from residents to invest in something with genuine environmental and community benefits. The fact that we’ve hit the target four weeks early proves how successful this project has been.
“All councils need to find new and innovative ways to fund the vital work that they do for their communities, and Swindon now has a template which other local authorities can follow. Embracing renewables will help Swindon Borough Council raise £1m more in business rates and rent by 2020, which means £1m more every year which can be spent on important local services.”
The investment was structured to be open to anyone with a minimum of just £5 and offered an effective rate of return of 6% over its 20-year term. During the three-month offer period it attracted an average of £18,000 in investment a day with a third coming from the Swindon area.
Construction of the solar farm has already started and is due to be completed by the end of this month.
The solar farm will help Swindon in its aim to install 200MW of renewable capacity by 2020, enough to meet the equivalent energy requirements of every home in the Borough.
It will be managed by a community interest company (CIC) wholly owned by the council. Some 65% of the distributable profits from the project will go towards funding local community initiatives, with the remainder going to the council.
Revenues will be raised from selling the electricity generated, as well as support from the Feed-in Tariff subsidy (FIT). The solar farm was pre-accredited for the FIT before government policy changes at the start of the year.
The Swindon Community Solar Farm was developed by Public Power Solutions, also a company wholly owned by the council, which structured the blend of public sector and community investment.
It was given planning consent though the council’s use of Local Development Orders, which speed up the planning process but still allow full public consultation.
Pictured: Construction of the solar array at at Common Farm, Wroughton, is now under way
