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Chase Community Solar - NOW FULLY SUBSCRIBED

Financial Performance

Please note that this information is no longer updated and is for reference purposes only.

Chase Community Solar aims to raise up to £750,000 through this share offer which will be used to instal solar PV on council owned bungalows in the district.

The project benefits from the government backed Feed in Tariff for renewable electricity production and is being supported by Sharenergy.

Forecast income and costs

Sharenergy has prepared two sets of financial projections - option 1, which outlines the scenario with 150 roofs installed at 3kW each; and option 2  which outlines 400 roofs installed, 300 at 3kW and 100 at 2.5kW.

The table below shows the forecast electricity output over the life of the project under option 2, which has a higher number of roofs. The forecast return or IRR to members remains the same but the contribution to the community fund is higher in option 2. There is no community surplus in option 1. Option 1 is outlined in full in the share offer document

All figures are in thousand of pounds (£,000).

Year 1 2 3 4 5 6-10 11-20 Total 1-20
Operating Income 149 153 156 160 164 877 2085 3744
Operating expenses 38 39 40 41 43 233 582 1015
Depreciation 64 64 64 64 64 320 640 1281
Operating cash surplus 47 50 52 55 57 325 862 1448
Interest on cash in bank 0 1 1 2 1 5 13 22
Pure Leapfrog loan interest -19 -17 -14 -12 -9 -10 0 -81
Member Interest -22 -27 -33 -38 -42 -283 -783 -1228
Surplus for distribution 6 6 6 7 7 37 92 161
Community fund 6 6 6 7 7 37 92 161

Notes

At the directors' discretion, share capital may be returned to members in installments over the 17 years from year 4 of the project. This will not affect the rate of interest the society intends to pay to members. For further information on members interest and capital returns click here. 
 
Chase Community Solar has applied for a loan from Pure Leapfrog for up to 25% of the minimum total capital required for this project. The exact amount will be finalised based on the number of homes included in the project. A decision is expected in December.

Detailed assumptions

  • Development costs have been covered by a previous pioneer share offer which raised £34,250 and an additional £1000 grant awarded by the Naturesave Trust. An additional £5,000 development cost is due to Sharenergy on successful completion of the offer. 
  • An 8% contingency fee has been built into the project costs, if this is not required part of it will be paid to Southern Staffordshire Community Energy Limited for development of future projects. This will be capped at 5% of project costs.
  • Installation costs are based on quotes from a reputable installer. The share offer will also cover legal costs associated with the template for the lease agreement.
  • Inflation is set at 3% per annum over the 20-year period.
  • Income is assumed to be 12.49 pence per kilowatt hour for the FIT component and 4.77p/kWh for the exported electricity, inflating annually by RPI according to the guidelines published by OFGEM.
  • Depreciation of equipment is straight-line over the 20-year period.Forecasts are based on a 20-year FiT period.
  • Business rates are set at nil due to reliefs available for renewable energy technologies.
  • Insurance costs are set at £6,000 a year. This is based on a quote from a reputable broker.
  • Administration costs of the Co-op are on the Sharenergy ‘small co-ops’ package which covers book-keeping, production of annual accounts, maintenance of membership database, phone, email and postal support of members, preparation of AGM papers and annual return, FCA and other regulatory fees. The actual fee will depend on the final number of members in the society, but will be between £3000 and £5000 per year.
  • Interest on cash in the bank is set at 2.5% across 20 years.
  • As all profits are allocated to a depreciation charge, paid as interest to Members or gifted to the Community Fund the projections do not predict a liability for Corporation Tax. 
  • Abortive visits - If the installer visits a property and reaches the conclusion that panels cannot be installed the society will be responsible for covering the cost of these visits which is quoted as £97 to cover the time spent. The assumption is that for every 10 visits there will be 1 abortive visit.

 

General assumptions

The table above assumes that:

  • Annual energy production of the Installation will be in line with the estimates made for option 1 and option 2 scenarios. In the event that the predicted energy production falls below the projected levels the revenues of the society wil reduce.
  • In the case of a technical fault, the Society will endeavour to make sure that this is covered by warranties and/or insurance, including for losses incurred as a result.
  • Current expectations relating to the global energy market, the UK electricity industry, UK Government policy, and the desirability for and promotion of electricity from renewable sources, will remain reasonably consistent and reasonably favourable to the Installation over the next 20 years, resulting in continuing demand for electricity.
  • Prices at a level reasonably similar to those currently obtainable will be achieved through the life of the Installation (after allowance for annual inflation).
  • Operation and maintenance costs will be incurred from the start of operations. Maintenance costs will continue to rise as the equipment gets older. It is assumed that operations and maintenance costs will rise no faster than the income. 

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