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Harborough Solar One

Financial Performance

Harborough Solar One aims to raise up to £149,700 through this Share Offer which will deploy a ground-mounted solar array installation to provide renewable energy to a local business and generate surplus income for a community fund.

Income

Harborough Solar One earns income from the installations through three sources:

  • Solar electricity generated, which can be used directly by the host building, is sold to the building occupier under a long term agreement.
  • Solar electricity generated, that cannot be used directly by the host building, may (depending on the project) be exported to the local electricity grid and sold to an electricity supplier.
  • A subsidy called the Feed-in Tariff provides payments for every unit of electricity generated. The Feed-in Tariff is guaranteed for 20 years and increases annually with inflation.

Costs

 This income is used to:

  • Cover the costs of maintaining the renewable energy installations, running the Society (e.g. management costs, insurances, accountancy and audit fees) and building up a reserve fund.
  • Repay loans to the Society and pay Members a return on their social investment.

All surplus income will be used by Harborough Energy to support projects addressing fuel poverty and climate change in the district.

Harborough Solar One Financial Projections

Year(s) 0+1 2 3 4-10 11-15 16-20
Income - PPA and FITs 27,351 14,177 14,522 111,990 92,208 97,257
Operational costs (3,952) (2,050) (2,102) (20,041) (30,369) (15,229)
Gross Annual Cash Balance 23,398 12,126 12,420 91,949 61,839 82,027
Interest payments (4% target) (5,988) (5,988) (5,988) (35,224) (14,970) (5,988)
Capital repayments 0 0 (4,403) (52,836) (44,030) (48,433)
Total payments to members (5,988) (5,988) (10,391) (88,060) (59,000) (54,421)
Cash balance (reserves) 17,410 6,138 2,029 3,889 2,839 27,606
Cash balance (reserves) accumulated £17,410 £23,549 £25,577 £29,466 £32,305 £59,911

Notes on the Financial Projections

1. The latest Harborough Solar One project is projecting a return of 4%.

2. Profits, subject to the maintenance of a contingency reserve, are paid to members as interest. Capital
may be repaid to members from the end of year 3 with all capital paid back by the close of year 20.
Additional reserves shall be used for community purposes as agreed by the members.

3. The total installed capital cost is £149,702.

4. Inflation is assumed at 2.5% over the 20 year period.

5. Income is based on the value of the Feed-in-Tariffs (Generation and Export) reflecting relevant FIT levels
plus revenue from a Power Purchase Agreement with NBJ (London) Ltd.

6. Equipment depreciation is straight-line over the 20 year period.

7. The Society will produce annual accounts and as a small business has exemption from audit.

8. Normal monthly cash expenditure is expected to be small and will be covered by the FIT generation tariff.

9. To minimise risk to our Members we will acquire comprehensive insurance to cover damage to or theft
from the installations.

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