Following the success earlier this year of its unique offer to residents to co-invest in a community solar farm, Swindon Borough Council’s Cabinet is to consider offering another solar investment opportunity at its meeting on Wednesday 19 October.
If approved, Swindon’s second solar bond would fund a new solar farm on a Council-owned former landfill site at Chapel Farm in Blunsdon, and will be the first in the UK to allow investors use the new Innovative Finance ISA (IFISA) to give them a tax-free return on their money.
This has been made possible following a Government announcement that from 1 November, the IFISA will include peer-to-peer investments such as debentures, allowing individuals to invest directly into businesses and projects.
The bond is expected to have a rate of return of 6%, and the solar farm is expected to make a contribution from profits towards community initiatives. It also aims to bring additional peace and quiet to residents along a stretch of the A419 dual carriageway, with the business rate and rental income to the Council from the solar farm being used to fund a 1300metre-long sound barrier. This will fulfil one of the Council’s 30 Pledges to residents that it intends to deliver by 2020.
Along with the financial benefits to investors and the community, the proposed solar farm will help Swindon move even closer to its goal to install 200MW of renewable capacity by 2020, enough to meet the equivalent electricity requirements of every home in the Borough. Completion of Chapel Farm, which would have a capacity of 5 megawatts (MW), would take the present total to 167MW – over 80% of the target.
The proposed solar farm would be managed by a new limited company, wholly owned by Swindon Borough Council, and would start to generate energy by Spring next year. It would cost £5.4m to construct, with £3m coming from the Council’s investment, and the remaining £2.4m from community investors.
The bonds would be provided in partnership with Abundance Investment, which has successfully raised over £20m for 20 different projects in the past four years. Abundance Investment is authorised and regulated by the Financial Conduct Authority.
The first solar bonds offer made by the Council to residents earlier this year, for a community solar farm at Common Farm at Wroughton, raised a total of £1.8m from community investors in just two months, closing a month ahead of the deadline. The Council put in a further £3m, and the farm began generating electricity on 29 June 2016.
Councillor Dale Heenan, Swindon Borough Council Cabinet Member for Transport and Sustainability said: “We caught the imagination of many earlier this year by offering the first council solar bond to the general public, and successfully raising £1.8m in eight weeks.
“Six months on, Swindon’s second £2.4m solar bond will be the first to allow residents to invest through the Innovative Finance ISA, and the first to build a noise barrier along a dual carriageway funded as a direct result of a solar farm on a landfill site. The barrier will provide a measurable improvement in the quality of life for hundreds of families who live along a road which is predicted to see an increase in traffic of 28% by 2028.
“The 6% return is fantastic when compared to most bank saving accounts which are offering less than 0.25%. I’m not a financial advisor but I would urge residents take a close look at the details. This project is an excellent example of Swindon’s renewable energy strategy, combining the economic and environmental benefits of solar with social benefits. It’s an approach which already means there is an extra £650,000 available every year to contribute towards council services.“
Bruce Davis, Managing Director, Abundance, said: “Following on the heels of the success of the first Swindon Solar bond, the Chapel Farm offer is another first for Swindon providing residents with the chance to help build a greener Swindon and get a return on their investment which is tax free. The innovative vision of the Swindon Borough Council team is being acknowledged across the UK as a real breakthrough in the problem of funding much needed infrastructure investment as well as generating new sources of revenues for local services.”
The financial details of the proposed project are being finalised, but people can register their interest by visiting https://www.abundanceinvestment.com/app/projects/swindon-chapel-farm-solar. If approved, the investment offer has a target date for launch of 1st November.
The solar farm already has planning consent and has been developed by Public Power Solutions (PPS), a wholly-owned company of Swindon Borough Council. The location was chosen because solar is one of the few productive uses for a former landfill site, and because it has good security and limited public access. It will be well-screened by existing hedges and new planting. If built, it would generate enough electricity to supply the equivalent of 1200 typical homes and save around 2000 tonnes of carbon dioxide a year.