FAQs for Investors
Homestead Solar Farm is a community owned solar array, owned by its members who have invested in the project, and receive annual interest on their investment. Investors were sought and signed up at a share raise in 2015. It is envisaged that there will be a further share raise in 2022.
Q. What is WCE?
A. WCE (or the Society) is an industrial and provident society set up for community benefit (a Community Benefit Society). This means it is governed by a set of rules that specify its business and how it should be run to ensure community benefit. WCE is in business to develop and operate community owned renewable energy projects. It expects to pay its members a return on their investment and benefit the wider local community through money allocated to a community fund. The Society is owned by its members and each member has one vote at AGMs, regardless of amount invested.
WCE has a longer term vision to develop and deliver energy efficiency programmes and offer energy supply direct to local consumers.
Q. Who runs WCE and how can I be sure that the organisation is managed properly?
The Society is governed by a constitution, and the constitution rules can only be changed by member vote. The financial returns will be independently audited and published to members with full transparency on financial performance and ongoing viability of the business. An AGM will be held every year to review performance and for members to vote on resolutions proposed, including the re-election of non-executive directors.
Q. Will the Directors benefit personally?
Q. What are the costs of operating the Society?
Q. What impact will this project have on efforts to address climate change or peak oil?
In addition the Community Fund will also aim to support further local community projects that reduce carbon emissions and address fuel poverty, for example energy efficiency improvements, local food production or sustainable transport initiatives.
Q. What is the wildlife situation at the Homestead Farm site and how will it be affected?
Q. Why is the Array sited at Homestead Farm?
Q. Why are you building a solar array on open land, shouldn’t this be used for agricultural purposes?
Q. Why do you talk about members being paid interest rather than a dividend?
Q. When will members’ interest payments be made?
Q. How robust is the projected income?
For solar projects, the performance of the system is sunshine dependent. The output will therefore vary a little year by year but should continue over the expected 20 plus year lifetime of the solar PV installations. We use standard projections of efficiency of solar panels based on manufacturer projections, including degradation in performance over the expected 25 year lifetime. The project is covered by leases with the landowners and by operations and maintenance contracts with the installer and insured against damage and loss of income.
Q. What are the key risks to the project?
• Lower than expected sunshine over the 20 year lifetime of the project – whilst this may affect individual years, our projections are based on conservative estimates of average sunshine hours which are very reliable over the long term.
• Increases in operational costs – the majority of the costs are contractual and therefore predictable over the lifetime of the installation. The management costs of WCE could vary over time, but these are a small element of the total cost.
• Increases to finance costs – the cost of finance is directly linked to interest rates, but in practice our loans are at fixed rates of interest.
• Physical security/continued operation of equipment – The equipment is guaranteed by the manufacturer for 20 years and insured against damage/theft.
• Continued operation of WCE – see below.
Q. Is my investment protected in any way?
Q. Under what circumstances could WCE go bust, and what would happen to my investment then?
In the event that revenue was significantly below expectations, the order in which payments to stakeholders would be made would be: first, debt repayments; then member interest; and finally the Community Fund. There is only a risk of insolvency if revenue fell so dramatically that WCE had insufficient cash to meet debt repayments, which would require a significant fall from our financial projections. In the event that WCE did become insolvent, it would be wound up. The debt provider would have a first claim over assets (i.e. the installed energy generation equipment) and any surplus assets would have to be transferred to another society with similar rules and this would be agreed by members at the time.
Q. Can I sell or withdraw my investment?
Q. Can my investment increase or decrease in value?
Q. What are the tax implications of the investment?
Q. What happens if I die before my shares are repaid?
Q. How much will be generated for the Community Fund?
To date, WCE has paid around £8,000 per annum to the Community Fund. Acceptance of this amount will be subject to a member’s vote at WCE’s AGM.