Big60Million Ltd. a new type of community benefit solar energy company set up by the U.K. arm of international PV developer and EPC, Belectric has unveiled this week a £20.4 million ($30.3 million) solar bond portfolio, offering local stakeholders the chance to earn 6% annual gross return on bonds purchased against a raft of new large-scale U.K. solar farms.
The offering invites investors to purchase bonds for £60 ($89) each, earning 6% annual gross return over a five-year, fixed-term period on recently connected large-scale solar PV farms that are eligible for the Renewable Obligation Certificate (ROC) at a rate of 1.4.
Collectively, these solar farms have added 34.3 MW of PV capacity to the U.K. grid, and have been developed to offer local communities the chance to play their role in greening the U.K. economy, according to Big60Million chief executive, Toddington Harper.
"The idea behind Big60Million named because there are approximately 60 million people in this country and we would like them all to benefit from solar energy is to engage people in local communities," Harper told pv magazine. "If they can see that they can benefit financially, environmentally, and socially from solar farms, they are much more likely to support them."
The bonds being offered by Big60Million include stakes in the £8.6 million ($12.75 million), 14.8 MW Atherstone Solar Farm; the £5.8 million ($8.6 million), 10.3 MW Southam Solar Farm, and the £6 million ($8.9 million), 9.2 MW Paddock Wood Solar Farm.
As a combined portfolio, it is the largest renewable mini-bond offering in the U.K. so far. "At just £60 and with a 6% return (gross), the benefits to local stakeholders are clear," Harper said. "Sharing the revenue generated by a clean, environmentally friendly and tangible solar farm among local groups rather than the normal investors in the city is the way forward for solar in this country, and is also directly in line with the U.K. government’s Community Energy Strategy."
One of the next steps, Harper said, is also to understand how the energy generated at these farms can also be used locally to provide further financial benefits, revealing that 10% of the bonds offered will be reserved for purchase by local households and businesses within a ten-mile radius for six weeks.
Biodiversity paramount to engagement
in order to attract the necessary local support for the solar farms, Big60Million will ensure that each plant is low-impact and pro-environment. "The solar farms are all to be turned into nature sanctuaries. They will be planted with acres of wild flowers fitted with beehives, bird boxes, hedgehog boxes and numerous other habitats to protect struggling species, and it is a great opportunity to nurture nature in the area."
Socially, Harper added, it is important for local communities to feel connected to the solar farms, which is why they have each been named after their nearest village. "A big part we feel in developing solar farms is asking yourself: what can we do for the local communities? For us, that also includes learning, engagement and education about what these projects are, and of course delivering the extent of the benefits they can offer, especially to local communities."
Tackling the inevitable issue of NIMBYism actually helped steer the creation of Big60Million, reveals Harper. "Facing objections during one of our first solar farm planning applications actually formed a huge part of our learning that led to the creation of Big60Million. One opponent even after the benefits of the plant had been explained to them turned around and said but whats in it for me? and it was at that moment when we realized the critical importance of having the community onside."
The three large-scale solar farms participating in this bond offering have all been connected to the U.K. grid to be entitled to receive a 1.4 ROC subsidy, and Harper revealed that Belectric is currently also preparing to launch a bond to raise for an additional large-scale plant "bigger than 40 MWp" that was qualifies for a ROC grace period. The project, close to Wroughton, England, will be constructed on land owned by the Science Museum and, as a result, also presents an incredible educational opportunity.
Big60Million is also working on a pipeline of smaller, 5 MW and under, solar parks across the country. "We think there is plenty of appetite for Big60Million solar bonds in numerous communities throughout the U.K.," said Harper.
Belectric U.K. and its international parent company builds and maintains the plants, which are owned by Big60Million and constructed using First Solar modules.
Last year, Big60Million launched its first community solar bond in the U.K. a £4 million bond for the 3.8 MW Willersley Farm in Gloucestershire, which received a higher 1.6 ROC subsidy and was able to offer a a slightly higher 7% annual gross return. The bond was almost 20% over-subscribed at financial close.
"We are also offering security over the assets of each solar farm," said Harper. "We take the risk of constructing and connecting the solar farms, and half of the revenue generated by each plant is effectively subsidized by the government. There is a tangible asset in a field that investors can see, and so we think it is a healthy way to make money and grow solar."