Swindon welcomes first UK council solar bond

The UK's first ever council solar bond has been launched in Swindon, offering councils and local authorities the chance to raise capital for a 5MW community solar farm.

The initiative will require £4.8m to be raised on behalf of Swindon Borough Council and peer-to-peer investment company Abundance. Minimum stakes – which can be acquired by small investors in the UK – are just £5 with a rate of return of 6% from the project, paid twice yearly.

Swindon Borough Council Cabinet Member for Transport and Sustainability Councillor Dale Heenan  said: “For years, companies have been trying to find ways to make investing more accessible and understandable.

“Swindon’s solar bonds provide an opportunity for people invest as little as £5 or more than £5,000, and enjoy better returns than their bank provides as they invest for their children’s future, their own retirement or just a rainy day.

“Our approach is democratic finance in action, and the combination of personal benefit, environment issues and community involvement provides a topical way to catch imaginations, and help improve personal finance skills in a simple, easily understood way.”

Swindon Borough Council will provide £3m of the investment, leaving the remaining money to be raised by investors. The council is also offering an ‘early bird’ bonus of 0.5% for the first five years that boosts the financial returns for anyone who invests within the first six weeks of the launch.

Once operational, the solar farm will add to Swindon’s renewable capacity of 140MW. The council is aiming to reach 200MW by 2020, which will provide enough renewable energy to power all the homes in the area.

Prime-time solar

The news comes one week after community benefit society Southill Community Energy (SCE) in Oxfordshire announced it was launching a share scheme for a community-owned solar farm set for construction in Prime Minister David Cameron’s constituency.

SCE is hoping to raise £3m to build a 4.5MW solar farm near Charlbury which was granted planning consent in July last year – meaning that it has been pre-accredited for higher Feed-in Tariff subsidies as it received planning permission before the government cuts came into effect.

SCE director Tim Crisp said: “This project has been led by the community from the start, and we’ve had to negotiate some tricky obstacles on the way, both during planning and with government changes to support for solar farms and community shares.

“We hope that Southill Solar will be a beacon of excellence on David Cameron’s doorstep, demonstrating the positive power of community energy. It’s energy democracy in action.”

The shares – a minimum of £250 and a maximum of £100,000 – offer annual returns of 5% over a 25-year lifetime. SCE has also pledged to invest £750,000 over this period to tackle fuel poverty and promote carbon reduction initiatives.

Earlier this week, analyst EY warned that the UK ‘needs to do more’ to promote renewable investment as the world enters a ‘year of reckoning’ for energy sourcing. Another recent report from Greenpeace has urged the next London Mayor to ignite a solar revolution in the capital by introducing a London-exclusive feed-in tariff (FiT) subsidy scheme and a new solar taskforce.

Matt Mace

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie