Last year energy company Big60Million launched its maiden solar bond offer. Having identified an ideal site for a prospective solar farm – the Cotswolds village of Willersey –  the company sought to finance construction by offering people the chance to invest in renewable energy with the UK’s first Climate Bond.

Offered to local residents first, solar bonds were sold at £60 each with no cap on how many could be purchased. With rates set at 7% gross for five years, the investments in solar promised returns almost double the average bond rate of 3.74% and far higher than many bank interest rates. The funding drive proved popular and ended up raising more than £4 million in nine weeks and was oversubscribed by almost 20%, proving Big60Million’s concept.

The 3.8MW Willersey Solar Farm came on-stream last year and further development of the site is now in full swing. Specialist cultivator firm, Flowerscapes has been hired by the firm to plant wild flowers and animal habitats litter the site, with Belectric’s flagship Sunny Honey produced by the farm’s several bee colonies.

Toddington Harper, CEO at Big60Million, says that the company has invested “hundreds of thousands of pounds” in ensuring its farms have the right biodiversity and plans are soon to be stepped up to include the planting of certain fruits and vegetables in particular rows. The land is now markedly different from how it used to look. The previous land owner had tried various crops on the site with little success and much of the soil still bears the plastic sheeting used in attempts to grow strawberries.

The company claims that it has meticulously designed and developed to precise measurements. The tips of each rack deviate no more than 1 cubic centimetre from each other in height and placement, a design factor that Harper says results in 5% increased efficiency over more standard farm designs.

The next step: energy storage

Next year, Big60Million’s partners Belectric will make the solar farm the first in the UK to be given its nascent grid-stabilising storage technology as part of the Enhanced Frequency Control Capability (EFCC) project.

The Belectric-designed battery system will be retrofitted to the thin-film solar farm – also designed and constructed entirely using Belectric technology – to test how energy storage can be used to control frequency on the National Grid. The system is set to be installed in Q1 next year and will become only the fourth Belectric has installed, with three other storage systems in place at solar farms across Europe.

The farm has been a notable success, both for Big60Million and its investors. Earlier this month the firm issued its first interest payments on schedule, and Harper says because of the solar farm performing above expectations it has already generated enough electricity to cover the next payment due in six months time.

Investors were invited to an event held at the farm earlier this week to celebrate the first cheques and while some certainly invested in the project on a purely financial basis, the majority present were quick to herald that they were indeed investing in renewable energy. “The opportunity to invest money in something that is both going to produce energy for people, free, from the sun, and also make a financial return, that’s a positive investment with a double whammy as far as I’m concerned,” Reverend David Haslam, a Methodist minister from Willersey, says. Mike Scowen, a retired business owner from Northamptonshire who also invested, said the returns offered were “exceptional” and far exceeded what banks and building societies could promise.

The success of the scheme has meant another three farms have been launched. Constructed and connected prior to this month’s ROC deadline, investors can now purchase bonds in a £20.4 million portfolio that forms the UK’s biggest ever renewables mini-bond offer. Residents local to the three farms have been reserved 10% of the bonds on offer and have until the middle of May to invest, with the final deadline expiring at 1pm 27 May.

“Our ambition is to encourage local people to benefit from the returns available from investing in solar farms, and to help ensure that the solar farms will make a positive impact on their communities, forging links with local people, enabling them to share in the solar farm’s profits, and creating sanctuaries for wildlife and bees on each farm,” Harper says.

The interest rate on offer is smaller at 6% gross, reflecting the 1.4ROC support level the next three farms have been accredited for. Harper is eager for Big60Million to continue to launch crowd-funded projects in the UK, but says it’s unrealistic that the 7% rate of interest those investing in Willersey received will be replicated elsewhere due to the changing subsidies available in the UK.

There is no ROC support available for projects in excess of 5MW any longer, but Big60Million remains committed to bringing other projects on-line. Rates on offer for future projects may fall to 4 or 5% over five years, but such rates would still represent an investment with sizeable returns. 

Even if interest rates must fall in line with solar subsidy support Harper insists the quasi-crowd funding model is one that works, particularly when they can contribute a variety of benefits to local communities in much the same way that the Willersey Solar Farm has. The UK’s split-ownership model remains an interesting way of producing such projects in the future, and a window Big60Million could look to exploit.

Harper says the need to give something back to communities was drummed home by one particular dissenter who opposed the Willersey project at its planning stage. “I went to talk to her to see if I could bring her round, and she turned round to me and simply said ‘what’s in it for me?’, and that really brought the message home.”