Burnham and Weston Energy, a Somerset-based community interest company that owns and operates one of the largest community solar farms in the UK, is raising £4m in investment funds through a bond issue.
The investment, launched on triodoscrowdfunding, will allow the company to return around £3m in surplus profits to the local community over the remaining 23-year lifespan of the project.
Half the surplus will be used to support the Sunshine Fund, a new grant fund for local projects to be managed by the local charitable trust Somerset Community Foundation. The other half will help households struggling to pay their energy bills through a fuel poverty advice service managed by the Centre for Sustainable Energy (CSE).
The 9.3MW community solar farm at Wick Farm, between Weston-super-Mare and Burnham-on-Sea, has been in operation for nearly two years and generates enough carbon-free electricity to power more than 2,000 homes, and over £1m per year in revenue. The solar farm is built on pasture land leased from a local farming family, who continue to graze sheep among the solar panels.
To develop the bond offer, Burnham and Weston Energy is working with Triodos Bank – the first registered UK bank to launch an investment crowdfunding platform. The bonds are open to anyone that signs up on the Triodos platform and will pay an initial interest rate of 5% a year, which will rise every year with inflation. The initial investment will be repaid in instalments over 18 years. As with all investments, interest payments are not guaranteed and capital is at risk. The bonds are eligible to be held in a Triodos Innovative Finance ISA which allows investors to earn interest tax-free.
Jake Burnyeat, director of Burnham and Weston Energy CIC, said: “The shift from a centralised fossil fuel-based energy system to one based on distributed low carbon and smart technologies creates the opportunity for communities to take back control of their energy systems. This can keep money in the local economy and turn energy production into an asset for the local community.
“Burnham and Weston Energy has been set up to help the communities of Burnham and Weston take advantage of this opportunity, with around £3m in surplus profits going into the local community over 23 years. ”
The minimum investment in the scheme is £200; roughly equivalent to two of the farm’s 36,000 solar panels. Investors will also become owners of Burnham and Weston Energy and have a say in how the company is run by appointing directors to the board on a one-member, one-vote basis.
The bonds will be used to repay the remainder of an £11m short-term loan facility from specialist community energy loan fund Leapfrog Finance. Over £7m has already been refinanced through a long-term loan from Triodos Bank. The bond already has the support of a £1.3 million investment from Big Society Capital, a social investment organisation which aims to improve the lives of people in the UK by connecting investment to charities and social enterprises that are creating social change.
- An investment in Burnham and Weston Energy CIC bonds is not covered by the Financial Services Compensation Scheme. Burnham and Weston Energy’s ability to pay the interest and repay the bonds is not guaranteed and is dependent on the continued success of its business model. These bonds are unquoted securities with a fixed repayment date and although the bonds are transferable, investors should be aware that they may not be able to access their capital during the life of the bond.