Project summary:
Westmill Solar Cooperative aim to purchase the Westmill solar farm, a 5 MW solar farm, generating enough clean power for 1,400 average homes and reducing emissions by 2,400 tonnes of C02 every year. The site consists of over 20,000 solar PV panels across 30 acres outside Watchfield near Shrivenham, just off the A420.
The site has been built and operating since July 2011. On 31 October 2012 we completed the acquisition of the solar park from a private operator for the community via a share offer and debt financing.
This is as first intended when the plant was built and we now believe it to be the world's largest community owned solar project.
Share sale
Did you meet your share offer target?
We needed to raise between £2.5 and £4 million in share sales. We raised more than the £4million maximum in the initial sale and therefore launched a private placement to existing subscribers - this meant we could eventually raise £5.8million in community funds.
Might my application have been rejected altogether in the scale-back this summer?
No, all applicants have become members, but may not hold as many shares as originally applied for.
How did your scale back work?
As we set out in our share Offer Document, in the event we were over-subscribed we would scale back applications based on the priority groups - those within 7km of the site, those within 40km, members of other cooperatives and customers of Good Energy. We were nearly 50% over-subscribed, so in order to include as much equity from members as possible we first launched a private placement for pre-qualified investors, and now that this has concluded, we have had to scale back investments by only one-third of the level originally required.
I've applied for shares - can I take my money out?
Members can apply to either transfer or withdraw shares. Shares can be transferred by arrangement if acceptable to the board. A limited amount may be withdrawable each year with the board’s permission, subject to any cap on withdrawals. This means that shares cannot currently be bought and sold on an exchange, but if an agreement is made and signed between two eligible parties, they can be sold by arrangement.
There is an exchange for these type of ethical and community shares currently under development (Ethex, see http://www.ethex.org.uk/), the directors are following the exchange's development and will examine options for shares to be traded on this exchange once it is established.
When will I receive my annual payment?
The exact date will be determined each year, but will most likely be around 6 months after the end of the financial year, therefore some time in Autumn each year.
Co-operative Organisation
What does it mean that you are a Co-operative?
Cooperatives stand for equality, they mean one member, one vote at meetings, no matter how many shares are owned. They also mean that profits are shared by the members so when the cooperative does well, the members do well. Owning shares in Westmill Solar automatically makes you a member of the co-operative - but there is no requirement to vote or become involved if you don’t want to. Examples of other co-operatives include The Cooperative supermarkets and Travel stores (Note: we are completely unrelated to The Cooperative Group).
Who is this going to benefit?
Everyone! Members will be entitled to a share in the profits, rather than the returns going to a big private company, therefore indirectly benefitting the local economy. The project generates clean electricity that helps fight climate change and contributes to ensuring energy security for the country, the local community are supported by annual payments to a community group.
So the economy, community and the planet benefit, while members get a return – we believe it is a win-win for everyone.
What happens if a member dies?
Shares will be transferred to the personal representative of the deceased. The shares can then be transferred to any other eligible person. The person to whom the shares will be transferred can be nominated by the deceased. The board must receive proof of death and proof of nomination before such action can be taken.
Who is involved in the process?
The board of Westmill Solar Cooperative are taking the project forward (read more about their experience here), together they have several decades experience in renewable energy, financing, legal issues and community energy. The specialist contractors providing professional services are recognised experts within the industry and include Burges Salmon (legal advice, share offer), Osborne Clarke (legal advice, bond finance), and OST (technical advice). Frank Gordon is project manager. Investec plc, a major international bank, are providing a loan and are engaged to raise bond finance in the longer term.
Community ownership
Has this been done before?
The concept of community owned renewable energy has been around for many years, in the UK there are projects in Scotland, Lewes, Brighton, and Cumbria, to name a few. What’s exciting about Westmill solar, is that we will be the first large scale community owned solar farm project in the UK – but this is a logical extension of a successful model tried and tested in many countries.
The project is viable and so stable because it is based on income from the government Feed in Tariff scheme, linked to inflation and guaranteed for the next 24 years.
Site operation
You say the solar farm is already operating – how is it doing?
Very well. The solar park has been in operation close to 12 months and has exceeded forecasts by 15% on average to date. This is mainly due to the above average sunshine we had earlier in the year, although June was unsurprisingly below forecasts due to the wet weather.
What about if the panels are damaged or vandalised?
Westmill solar cooperative is fully insured against any damage or vandalism and has a comprehensive maintenance contract in place which requires the contractor to meet certain operating standards and levels of electricity generation.
A comprehensive security contract is in place for the solar park with sophisticated security technology and a perimeter fence around the entire site.
About the project
Will inflation affect the project?
Yes. All FIT payments rise each year in line with inflation, therefore returns will increase in overall terms each year. Inflation also affects the debt payments on the bond we are seeking, which are modelled at inflation (RPI) +3 - 3.5% per year. This arrangement offers flexibility rather than committing the coop to a fixed cost.
Do local people receive a discount on energy bills as a result of involvement in the project?
Different projects sometimes include discounts for all bill payers in an area, but these are often run differently, for example investing the profits made in cutting bills rather than paying members, and often do not include community ownership. Our project is a community-owned cooperatively run project, and does not offer any energy bill discounts at this stage.
Please clarify what happens at the end of the 24 years?
At the end of the 24 year project the Feed-in-Tariffs are no longer eligible, and it is assumed that the project will end, share investors will have received 24 years of interest payments and their original capital back.
Our projections are based on the project coming to an end in 2036, however it is possible that the solar panels are still working and generating energy and that energy prices are high enough to justify continuing to supply electricity. In this case members would be consulted as to their preference for the project and what the cooperative's future should be. It is hard to make any definitive decisions so far in advance and important that members get their say in any future decision.
Will you upgrade the solar park in future years as solar technology improves?
This is not currently envisaged or modelled for under the financial Base Case model. Any such future decision would be a matter for members.
Can I still get involved in the project?
We are sorry but applications for shares (and therefore membership) have now closed, there are lots of other great community energy schemes throughout the country which you may be able to invest in.
You can keep in touch with us via facebook and twitter and get the latest updates from our news section.
What will the project revenues be spent on?
Westmill Solar Cooperative will use the projected revenues to pay investors returns on their shares annually, to service the charge on the debt financing, to pay for maintenance and security, administer the organisation, and to make regular payments to WeSET, a local community organisation involved in environmental education, sustainability and related projects in the local area.
Payments to WeSET will support their work locally on environmental education, arts, work with local school children and other related activity that will help spread the benefits of the cooperative and the project and is a major part of the cooperative and community energy ethos. Find out more about WeSET here: www.weset.org/
What are the potential future project challenges in relation to making the project a reality?
Westmill solar have completed a major share offer and are now working to secure the necessary debt finance to purchase the solar farm which will be owned by the cooperative.
As we progress in this, the main future challenges we face are securing the debt finance (a major bank has been mandated to secure bond funding for us and we are actively exploring options) and completing the purchase of the solar farm from the current owners.
The final deadline is the end of October by which time we aim to have completed the solar park purchase with debt finance in place and all legal issue scompleted.
What should I do if I have any other questions not covered here?
Please just drop us a line at info@westmillsolar.coop or on 01367610001