Shoalhaven seeks $120,000 for 99kW community owned solar project

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Updated: Shoalhaven community energy group offers 6.5% return in 99kW solar system at NSW bowling club. Construction starts next week.

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(Note: This story has been updated to correct the amount to be raised from the public – $120,000, not $200,000 as originally published).

Installation of what will be Australia’s largest community-owned commercial solar system is set to begin next week, after the Shoalhaven Heads Bowling and Recreation Club signed off on the 99kW project on Tuesday.

The project, dubbed Repower One, is being driven by Repower Shoalhaven, a community group formed last year to spearhead the south-coast NSW town’s transition to sustainable energy systems.1406714366

The group this week launched its online campaign to raise $119,800 for the almost 100kW project, which would also be Australia’s largest such project financed by ‘everyday investors’.

Locals are now being invited to register their interest in the project, which will officially open for investor subscriptions next week.

Repower is calling for an upfront investment of $5,990 per shareholder, for a 3.96kW share of the system. The rate of return projected for investors is 6.5 per cent a year, over a 10-year period.

Ultimately, the plan is for 80 per cent of the rooftop solar system to be funded and owned by community shareholders, with the remaining 20 per cent to be owned and funded by the Club. The Club will purchase the electricity from the solar power system, ensuring investors a healthy revenue stream, and at the end of the 10-year term, the bowling club will be ‘gifted’ the system.

6408026“What’s so good about this type of project is that it’s developed by the Shoalhaven community via a democratic member process,” said Repower Shoalhaven’s president, Chris Cooper.

“We’re still 100% run by volunteers who meet once a month in the town library to make it happen. We’re driven by the desire to see a strong local economy and proactive action on climate change.

“We are using local installers, suppliers and investors. That means most of the money will stay here, instead of going to a coal generator or a network monopoly to perpetuate an already unsustainable system. And surely that is positive, regardless of your politics”.

Tapping the local community for funds to develop solar is indeed an attractive proposition in regional communities like Shoalhaven, where finance for such projects might otherwise prove difficult to raise. But it is a model that is only just taking off in Australia.

“In Europe and North American, we’ve already seen the ‘crowd funding’ model used to make solar projects happen. But this is the first community-owned solar project in Australia and I think it will be the first of many for Repower Shoalhaven,” Cooper said.

In Victoria, a group called LIVE – Locals Into Victoria’s Environment – is attempting a similar feat, only in this case it is for a project in the inner city, to install up to 1000 solar panels on the roof of the South Melbourne Market, adding to about 150 already in place there.

LIVE spokesman and co-founder David Robinson has noted that for inner city dwellers who rent, or live in public housing, installing solar on their own roof is not an option.

Inviting inner city locals to invest small amounts – often around $1000 – to install large solar arrays on community or commercial properties like that planned for the South Melbourne Market offers them the chance to participate in the shift to renewable energy.

And Cooper agrees. “With community solar, everyone can invest. “Retirees, mums and dads, renters, apartment dwellers and so on – we are really trying to make solar ownership more accessible than ever,” Cooper said.

For the community of Shoalhaven, the Bowling Club project is seen as a three-way win.

“Not only do we avoid the upfront cost of the system, but we purchase electricity that is affordable, clean and locally owned. It’s a win for the Club, the community and the environment,” said the Club’s general manager, Mick Bowen.

And Lyn Easton, the Club’s President, says the project is also about educating the community on how to save on electricity bills.

“It’s better to be pro-active and innovative,” Easton said. “I’m very interested to see the positive difference the solar system makes to future electricity bills.”

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15 Comments
  1. Marka 5 years ago

    How does this work from an investment point of view? If I only get back 6.5% pa for 10 years and then i gift the system then I don’t get back my principle and i’m down about $2K

    • Anthony Szatow 5 years ago

      Hi Marka, 6.5%pa returns over 10 years is pretty typical for solar and would include your capital being repaid over the investment period.

      By way of example, if a $10,000 system saves $2,000 a year and at the end of 10 years the system is worth zero, then you have turned $10,000 into $20,000 over 10 years ~ roughly the same as getting 6.5% per annum over the 10 year period

  2. RobS 5 years ago

    They are going to have to seriously improve the economics of this. They are charging ~$1.60/watt for a 10 year solar lease where you own nothing at the end when you can buy a system outright for ~$1.30 per watt and it will be your for ~25 years. It may appeal to anyone who is renting and cant self install a system and the economically illiterate but no one else.

    • Anthony Szatow 5 years ago

      conversely Rob, if someone is looking for reasonable, secure returns while making a positive environmental and social contribution, it may be entirely reasonable. It is not a get rich quick scheme, but it is much better than money in the bank, and better than money in equities for those that don’t enjoy the ups and downs of the market.

      Note that solar panels and inverter warranties will typically be for 10-years, so the investors have that security. The bowls club will benefit from the panels beyond that of course, and hopefully they would re-invest some of those savings in their community.

  3. Jacob David Tannenbaum 5 years ago

    Someone correct me on this, but let’s say that the bowls club really can use all of the electricity that’s produced even during peaks, that means that each investor’s 3.96kW share (assuming capacity factor of 14%) is selling 4,859kWh per year. at 22 cents per kWh that’s $1068 per year. Taking out administration costs you’re getting close to 16.5% a year instead of 6.5% a year – maybe it’s a typo?

    • RobS 5 years ago

      The bowls club who manages the system gets the lot then pays out the “return” to the shareholders of 6.5%, any return over this, over double as you point out, they skim as profit. The numbers on this project are horrific, bordering on an outright scam.

  4. David Osmond 5 years ago

    Hopefully someone will clear up this confusion. However one would hope that someone who invests $10k will get a return of just under $1,400 each year for the next 10 years. That would provide a rate of return of 6.5%. As others have pointed out, if they are instead paid only $650 per year (ie, 6.5% yield), then that will result in a negative return if there’s no return of capital at the end.

    • David Osmond 5 years ago

      Or for a $5990 investment, getting back $835 each year for a 6.5% rate of return. That would fit in better with Jacob’s calculations of $1068 per year revenue.

  5. Chris 5 years ago

    Clarifying this article, we are only seeking $120,000 from the community. Seems the author has got their maths wrong. It’s all clear on our website http://www.repower.net.au

    • Giles 5 years ago

      Apologies to all, and to Chris and Repower Shoalhaven people, RE got the number wrong, as Chris has pointed out. That has now been corrected and it should address some of the questions about investment and returns. We think this, and community projects in general, is a fantastic initiative, which is why we gave it prominence, Apologies for getting it wrong.

  6. Chris 5 years ago

    Sorry for the delay responding to the commentary on this article (I’m actually in Germany):
    Our project is set up to provide an IRR of 6.5%. This is not the ROI. ROI is simply annual or year 1 return divided by initial investment, like the inverse of payback period. Average ROI in our project is 15% which sounds a lot better than 6.5% but it doesn’t mean that much if you’re giving the system away at the end – that’s why we use IRR!

    IRR can be compared with a fixed term deposit, the only difference is we are returning investors their principal annually, instead of in a lump sum at the end.
    Clear example: if I invest $6000 in Repower One, I’ll get $900 back a year for 10 years on average. At the end I’ve turned my $6000 into round about $9000. But even better than that I’m getting it back evenly each year (unlike shares or a term deposit) therefore freeing me up to reinvest these cashflows somewhere else – perhaps in other community solar projects!!!

    I hope this clears up your concerns.

    • RobS 5 years ago

      Thank you for the clarifications, seems much more reasonable. Still think it should be made clear that if you have a choice between solar on your own roof bought outright or solar on the bowling club roof via your vehicle that solar on your own roof wins on IRR, but your scheme certainly beats any cash investment available and beats many equity investments too, particularly with Interest rates on online accounts sitting at 2.5% and term deposits only marginally better. My parents live in Vincentia and I will see what I can do about talking them into investing in this now the details are clearer and fairer.

      • Tom Nockolds 5 years ago

        30% of households in NSW are living in rental accommodation.

        This investment opportunity makes it possible for renters, apartment dwellers and those who can’t otherwise put solar on their roof to take part in the rooftop solar revolution sweeping our country.

        Bring it on!! Let’s see lots more of these project happening across the country. Congratulations Chris and the RePower Shoalhaven crew!

  7. Les 5 years ago

    Congratulations on your project. May there be many more of these in the future.

  8. Bernadine Morgan 5 years ago

    Love to see this story posted on the ‘Community Power’ section of RenewEconomy –

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