The U.K.s first council solar bond has been launched this week by Swindon Borough Council, which has backed a £4.8 million ($6.7 million) community solar project that will see the creation of a 4.8 MW solar farm in the region with council and community-sourced funding.
The Swindon Community Solar Farm, near to the Wiltshire town of Swindon in southern England, secured a higher rate of feed-in tariff (FIT) prior to the latest round of cuts and, provided it is connected to the grid before June 29, will be eligible for this higher rate.
In order to fund the development, the project will secure £4.8 million in funding from local residents and other private investors across the country. However, the bulk of the money required – £3 million is being provided by Swindon Borough Council in the first such council-backed solar scheme of its kind in the U.K.
Local residents interested in investing in the community solar project can buy a minimum stake of just £5 in the project, with each bond holder set to receive a 6% rate of return on their investment, paid in twice yearly instalments.
Early-bird investors those who purchase a stake within the first six weeks of the bond offering will get a 0.5% bonus rate of return for the first five years of the scheme, the council confirmed.
Renewable energy project developer Abundance Investment is providing the bonds, and the firms MD, Bruce Davis, called the scheme a "win-win investment" for Swindon Borough Council, local residents and the U.K.s clean energy landscape, which has been savaged in recent months as severe solar subsidy cuts have been announced by government.
Swindon Borough Councils subsidiary, Swindon Common Farm Solar CIC, will own and operate the solar farm, which is being constructed near to the village of Wroughton.
"For years, companies have been trying to find ways to make investing more accessible and understandable," said Swindon Borough Councils cabinet member for transport and sustainability Dale Heenan. "Swindons Solar Bonds provide an opportunity for people to invest as little as £5 or more than £5,000 and enjoy better returns than their bank provides."
Swindons council has targeted the installation of 200 MW of renewable energy capacity by 2020. Already, some 140 MW largely solar and wind power is either under construction or in the planning stages, the council confirmed.