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The community energy revolution takes hold in Somerset
A community solar company in Somerset has big crowdfunding ambitions.
News
- 26 September 2018
As the cost of renewable energy continues to tumble, a new wave of community energy projects is transforming the way we think about energy supply and proving that decentralisation is a genuine alternative. These energy projects are becoming truly viable as a way to cut out the need for expensive infrastructure. As a result, projects across the UK are joining together to invest in new energy sources, often resulting in cheaper bills and reinvesting in the local area.
Such schemes have already thrived across Europe and are now being forged by UK pioneers such as Mendip Renewables, a community benefit society which owns and operates a 5MW solar farm in Somerset. The solar farm, Whitelake Solar, in the village of Pylle, has already generated over 10,000,000 kWh of carbon-free solar electricity in its first two years. That is enough to power the equivalent of around 1,290 homes.
One of the largest community solar companies in the South West, Mendip Renewables is now looking to raise £1.8 million through a bond issue on Triodos’ crowdfunding platform.
“Investors not only enable us to create local, renewable energy, but can also be assured that their contribution is going directly to the individuals and organisations that need it most in our local community”
Jonathan Thompson, Director of Mendip RenewablesThe bonds pay an initial interest rate of 5% a year, which will rise every year with inflation and will be redeemed in instalments over 17 years. The bonds are eligible to be held in a Triodos Innovative Finance ISA, allowing investors to receive tax-free interest. But be aware that unlike bank deposits, an investment in Mendip Renewables’ bonds is not covered by the Financial Services Compensation Scheme. Payment of interest and repayment of capital are not guaranteed and are dependent on the continued success of Mendip’s business model. The bonds are not listed on a recognised investment exchange, so investors should be prepared to hold the bonds for their whole term.
The director of Mendip Renewables, Jonathan Thompson, advised that by supporting the solar scheme, investors “not only enable us to create local, renewable energy, but can also be assured that their contribution is going directly to the individuals and organisations that need it most in our local community. Solar is a great, reliable technology, and our job is to make sure the solar farm continues to operate successfully for years to come, earning money to pay back investors and help the community.”
Over the next 23 years, Mendip Renewables expects to generate around £1.4 million surplus after paying operating expenses and finance costs. The surplus will be used to support local charities through a community benefit fund. The first such beneficiary is local charity Key4life which will receive an initial £25,000 to provide employment support to 20 young men aged 18-26 from Somerset who are at risk of going to prison.
Eva Hamilton MBE, the founder and CEO of Key4Life, commented that the charity’s last preventative programme “saw 73% of participants in sustained employment and meaningful occupation. This bond will unlock vital funds for a further preventative programme in 2018.”
Thompson also stressed the importance of this crowdfunding effort to the local area: “this is a great Somerset story: a solar farm in Pylle, managed by a team in Stratton-on-the-Fosse, works with a team in Bristol to raise finance, produces clean energy in Somerset and contributes money to a Somerset charity that helps young local men.”