Table of Contents
What level of commitment is associated with registering?
A registration is non-binding and you are not obligated to proceed with investing in SolarShare if you have registered. Please take the opportunity to read the information available on this website before you register. You are not committed to investing until you accept the investment offer detailed in the disclosure document, which is released after a host site and developer have been finalised.
What is the difference between registration and membership?
A registration is an expression of interest. There are no costs associated with registering. When you invest in the community solar farm, you become a member. In addition to your investment amount there is a $50 fee for share transaction costs when you become a member.
What happens if SolarShare receives too few registrations to fund the solar farm? Will the project still go ahead if some of the people who register decide not to invest?
Yes the project will still proceed. The board will consider the options available. These include:
- Extending the time for which SolarShare is open for investment
- Negotiating a smaller project size with the solar farm developer
What happens if SolarShare receives more registrations than the value of the solar farm?
- SolarShare has been created to allow local communities to own their own energy generation infrastructure. For this reason, we will prioritise registrations from Canberra postcodes if we are oversubscribed.
- In the event there is still an over-subscription, you may be offered a smaller amount of shares than you initially registered for.
How can I verify the amount I have registered to invest?
You can view your registration details, including the registered amount, by clicking on the private link that was sent to you at the time of registration. If you’ve lost that email don’t worry, you can have your private link resent by clicking here.
Electricity sale and income
Who buys the solar energy?
Depending on the project site, SolarShare will sell the solar power in one of two ways.
For some, mostly rooftop projects, the solar power plant will sell energy directly to the energy user on the property where the solar power plant is located. This type of contract is often called a power purchase agreement. The energy user receives the benefit of a predetermined electricity price for many years to come and can hedge against possible future price rises. They can also be confident that their energy is sourced in an environmentally sound manner.
The second type of project is where the electricity is sold out to the grid. This is done under a contract with ActewAGL retail. The contract is called a Feed-in-Tariff contract, which is a fixed price scheme for solar power plants operating in the ACT. This is a result of ACT government legislation, which stipulates that an electricity retailer operating in the ACT is required to enter into a 20 year agreement for purchase of the power. More information about the Electricity Feed-In Act (2008) and Large Scale Renewable Energy Generation Act (2011) is available on the ACT government website.
SolarShare has certainty under both types of contract on the price the community will receive for the solar energy and the duration of the contract. SolarShare will release details of the type of energy contract selected and who the energy customer is when the community solar farm is open for investment. Click here to see the stages involved in joining SolarShare and the time frames covering when particular information will be released.
Where can I learn more about power purchase agreements?
There is a significant amount of information available online from companies and institutions. We suggest conducting a Google search if you want to research this further.
Isn’t the ACT Feed in Tariff closed to new developments?
The Feed in Tariff closed to new applicants on July 13, 2011. However, some solar developers applied for a Feed in Tariff allocation for projects they have not yet constructed. Working with these developers provides an opportunity for building a community solar farm supported by the Feed in Tariff.
Additionally, there is scope for SolarShare to enter into a Feed in Tariff contract under the Large Scale Renewable Generation Act and in particular the Community Solar Initiative announced as a program under this legislation.
Where can I learn more about the Feed in Tariff?
Formal information on the ACT feed-in-tariff can be found on the ACT government legislation website under:
- Community Solar Initiative – Environment and Sustainable Development Directorate
- Electricity Feed-in (Renewable Energy Premium) ACT
- Electricity Feed-in (Renewable Energy Premium) Rate Determination
ActewAGL Retail’s Feed in Tariff information is are available on the ActewAGl website at:
How will the board of directors be formed?
As SolarShare becomes legally incorporated it will have an initial meeting called a formation meeting, which is similar to an annual general meeting (AGM). Members will elect the first board of directors at this event.
What due diligence has been done on SolarShare and the other organizations you are working with? (E.g. solar farm developers, contractors, etc.)
SolarShare has a Board responsible for ensuring the progress of SolarShare’s plans and activities, to minimize the risks to the project and who are answerable to SolarShare’s members. This includes conducting due diligence on any of SolarShare’s providers, including developers and contractors.
How will directors be elected?
Every year, new directors will be elected at the AGM according to the Board’s terms of reference. Directors are scheduled to stand down in a staggered fashion with one third of the board positions vacated each year. A director’s term of office is three (3) years. SolarShare is governed by a vote at the AGM. Each member has the opportunity to vote on motions at general meetings, including elections of directors.
What is a member owned business?
A member owned business is designed to encourage member shareholders to have a closer connection with the activities of the enterprise. In a legal sense, SolarShare is incorporated under the corporations act as a public unlisted company. It is controlled by a board of directors who act on behalf of the member shareholders, this kind of operation is also sometimes called a mutually owned business. Examples of other member owned businesses in Australia are bankmecu, Independent Liquor Group and RACQ.
In contrast to many corporations, where the board must act solely to maximize the financial return, the board of SolarShare is chartered to act for the benefit of its members.
What is the legal liability of SolarShare members – is it limited to the value of shares as it would be with a limited liability company structure?
Yes, legal liability is limited to the value of shares held by a member.
What are the membership requirements?
SolarShare requires a minimum level of activity from members. To retain membership you will need to continue to fulfil these active membership requirements:
- Remain subscribed to our newsletter.
- Own a minimum number of shares ($350).
- Complete our annual members survey.
Who handles the money when I invest?
All matters pertaining to accepting of share application monies, share allotments, share transfers, dividend payments and associated issues will be handled by a company offering professional share registry services.
What happens if weather, vandals or some unforeseen circumstance damages the solar farm?
The solar farm will be covered by an insurance policy, which will protect against damage to the equipment due to a wide variety of causes. The solar panel and inverter equipment manufacturers also provide some additional recourse through their guarantees. Further information on equipment guarantees can be found below.
What guarantees and insurances are there?
As with any organisation, SolarShare will carry insurance to help manage its risks. This includes insurance for the equipment at the solar generation facility. Additionally the generation equipment (e.g., solar panels, inverters) carries manufacturer’s guarantees. Please read the project specific information when it is published in the disclosure document for more on equipment guarantees.
What are the guarantees on the equipment?
SolarShare will only use solar generation panels that have a 25 year performance guarantee which warrants them from producing not less than 90% of their rated power after 10 years and not less than 80% of their rated power after 25 years. This is measured under particular testing conditions called a ‘flash test’. In addition to a performance guarantee, solar panels come with a manufacturer’s warranty, which covers the materials and construction of the panels. An example of this would be de-laminating of the backing film on a panel. If a material defect affects panel performance below the 90% and 80% levels, then it will be covered by the performance guarantee even if the manufacturer’s warranty has expired.
The second key piece of equipment in a solar power system is the inverter. Inverters account for a smaller portion of the capital cost compared to the solar panels. SolarShare will only consider inverters with at least five year warranties, with the preference being warranties for ten years. Following this period, SolarShare’s has budgeted an inverter replacement expense into the financial forecasts.
Who provides the legal services?
Chamberlains Lawyers will provide all legal services, including drafting the constitution and disclosure document and giving advice on the legal relationship with the solar farm development companies and site owners.
Who is providing financial advice?
Pricewaterhouse Coopers have been selected to provide financial advice including validation of SolarShare’s financial model, structuring, taxation and preparing the company’s accounts for auditors.
What is the minimum investment?
The community solar farm’s shares will be $10 each, with a minimum purchase amount of $350. There is a one-time application cost of $50 which pays for the processing of the application and share registry functions which are handled by a third party share registry.
When are dividends paid?
Dividends will be paid annually.
How does this investment interact with the energy I use in my home?
Since the community solar farm project is not located at your house it cannot directly supply your home’s energy requirements. You will still need to buy energy from an energy retailer who supplies and bills you for your electricity usage.
Where can I find financial projections?
Financial projections can be found in the disclosure document and are made available once we have finalized negotiations with the solar farm developers.
What will the return be?
SolarShare has a number of criteria to assess before determining whether a particular solar project will be suitable for community investment. SolarShare is aiming to provide a return to member investors in the range of 4 to 6 percent, which is comparable with current rates that banks offer in their high interest savings accounts. The particular returns for a solar project will be disclosed after SolarShare signs an MOU with a project site and or developer.
Are there any tax concessions? Is the estimated return a franked return (after tax has been paid by the company) and will the actual return to the investor be grossed up?
You will need to seek personal and tailored advice specific to your taxation situation regarding any tax implications of investing in SolarShare. Naturally, we are unable to provide financial advice.
SolarShare plans to distribute franked dividends, and the estimates of returns do not include franking credits. Therefore, in addition to the returns mentioned, investors would receive franking credits that will result in a higher gross return as they can claim a tax credit (called a franking credit or an imputation credit) for the amount of tax already paid on their behalf by SolarShare. There will be more information on our planned distributions in our offer information statement. More about franking credits can be found at: http://en.wikipedia.org/wiki/Dividend_imputation#Australia and http://www.ato.gov.au/Forms/Refund-of-franking-credit-instructions-and-application-for-individuals-2012-13/?page=10
Is return calculated after depreciation of the asset?
Yes, return is arrived at after deducting depreciation expense.
Does SolarShare need an Australian Financial Services Licence (AFSL) as it is collectively investing funds from the issue of shares into an asset that will generate income for the shareholders?
We have been advised by Chamberlains (our Lawyers) that SolarShare does not require a license. This is because SolarShare will be covered by the ‘self-dealing exemption’ (Refer Section 766c of the Corporations Act 2001) as it is issuing securities on its own behalf, and is not offering a financial product in any third party security, insurance contract or other financial product.
Are the shares transferrable?
Yes, members may sell their shares in the community solar farm. Although SolarShare cannot list the shares on a public exchange such as the Australian Stock Exchange, it will facilitate easy transfer of shares by liaising with people who are looking at buying or selling existing shares.
What happens after 20 years, when the project reaches the end of its life?
As the equipment reaches the end of its life the board will consult with members, the host site, and other stakeholders to decide on the best course of action. One of two general paths may be taken:
- Members will have the opportunity to re-invest their funds enabling SolarShare to purchase new equipment to continue operation of the solar farm. This is known as ‘re-commissioning’
- Initial invested capital will be returned to members and the project will be decommissioned.
During the life of a SolarShare project, SolarShare may pay back to its members some of the invested capital as well as the dividend for that period.
What would be the investment required for a 5kW ‘Share’ of the project? How does this cost compare with systems from retail solar installers?
A 5kW capacity system in SolarShare works out to an approximate investment of $12,500. This is slightly higher than current prices from residential solar installers for this size of system. The price from an installer is lower because it is after what is called the RECs discount is subtracted. However by accepting this discount the customer signs away his/her right to the ‘green’ portion of the generated electricity, and thus, will not have the right to call it a carbon offset.
Cheaper solar power is one effect of RECs, however the issue is more complicated than this.
RECs are a way of certifying energy came from a particular source. The surrender of a REC is able to certify the energy they use as coming from the source which generated the REC.
If you want to have energy you use as being counted as coming from a green generator you have to have (and surrender) the REC to prove it. Selling the REC to another party gives them the right to surrender it.
This is most often done by an energy retailer on behalf of their customers, when someone signs up to a Greenpower scheme. If you have sold your REC you give the purchaser the right to use it in certifying a Greenpower sale to another customer
When you sell a REC (or use it as a discount on your system price) it is (usually) sold via a REC broker to an energy retailer who can then claim electricity they bought from a polluting source as green energy. People who sell RECs allow the purchaser to have the right to use energy (from any source) and count it as green energy as if it came from the seller’s generator.
When you buy Greenpower the electricity retailer surrenders RECs on your behalf, equal to the quantity of green electricity you buy. It is not sensible to sell RECs from your solar power system and also be signed up to a greenpower scheme, this is because you are equally able to surrender the RECs yourself (much more cost effectively) then selling them to have them eventually bought by a retailer who will surrender them on your behalf and call it greenpower.
For further reading please refer to:
https://www.climatechest.org.au/whatis/518b3dc8f944570002000002 and http://www.enviroshop.com.au/info/33
Why does it suit people who don’t have a roof?
If a person doesn’t have a house or property to put solar on, then there are very few ways they can be involved in generating renewable energy. Until now, people who rent, move frequently or just don’t have a roof that is compatible for solar power have been excluded. SolarShare presents these individuals a new opportunity to benefit from local renewable energy.
Who are the other investors?
We cannot disclose details of individuals in the community who have registered or invested, as this is confidential information. Perhaps the easiest way to meet them is to come along to one of our events.
Is this limited to Canberra residents?
No, this is an opportunity open to everyone. While we encourage local ownership as much as possible, there are many people who are originally from Canberra but might currently reside elsewhere.
How is SEE-Change involved?
SEE-Change is a local sustainability not-for-profit organisation that has created and nurtured the SolarShare project. SolarShare was formed by a group of SEE-Change members who formed a renewable energy special interest group called Canberra Clean Energy, which held workshops, talks, stalls and surveys to gauge community interest in different energy projects and researched a number of viable options for what could be achieved.
SEE-Change and Canberra Clean Energy personnel ran the SolarShare project during its pre-incorporation phase. There is significant work involved in creating a community solar farm for Canberra and we would like to acknowledge the considerable contributions made by all of the volutneers and staff. Additionally, many of the initial members of SolarShare are expected to come from SEE-Change’s membership.
To what extent is this supported by the ACT government?
SEE-Change was awarded a sustainability grant to setup the Canberra Clean Energy sub group to carry out all the work exploring what community solar options exist, conducting feasibility studies, and researching all of the legal, financial, and business aspects of operating a successful community solar project. This work has been carried out by a mix of volunteers and paid staff.
Will the expertise gained in setting up SolarShare Canberra be used to seed future projects?
At each step the project team have taken care to include scalability to other projects as one of the important requirements when making decisions. Depending on the wishes of the members, SolarShare may be expanded to include other projects or separate SolarShare initiatives may be created based on the template and lessons learned from SolarShare Canberra.
Is the project team being given shares or in-kind recompense for volunteer contributions?
SEE-Change will be given 5% of the shares of the first community solar project as recognition in kind for all the support and volunteer effort that it has contributed to the project.
What type of panels will SolarShare use?
Solar technology is gradually improving. Regular announcements are made on the latest scientific breakthroughs regarding cell efficiencies, including the technique of ‘sandwiching’ or layering together multiple solar cells, with each different layer of the sandwich tuned to different wavelengths of light. Despite these incremental improvements most of these breakthroughs will not be ready for cost effective commercialization for a number of years.
SolarShare is focused on using commercially proven technology to ensure the solar farm is constructed with value for money and reliability in mind. This means using solar Photo-Voltaic (PV) technologies such as mono crystalline and poly crystalline, which have proven reliability and have achieved vast cost reductions in recent years.
Has Concentrated Solar Thermal (CST) technology been considered?
As technology progresses, concentrated solar thermal is likely to prove to be an excellent technology for commercial solar power generation.
However, the scale of the project that SolarShare is pursuing is better suited to a Photo-Voltaic (PV) solar generating technology. PV has been commercially proven in the ACT and presents a lower risk for community investment.
Other solar questions
Recently there has been an announcement about some large solar plants for the ACT. Is SolarShare involved with these?
No, Fotowatio Renewable Ventures (FRV) was successful in bidding for a large scale Feed in Tariff for a 20MW solar facility. Additionally Elementus Energy has been developing a project at Cooree near Uriarra village. Neither of these are related to SolarShare’s community solar project.
How big is a medium scale solar farm? How big would a large one be?
Medium scale solar farms are those between 30kW and 200kW in size. Large farms are bigger than 200kW.
A 200kW solar farm occupies a little over a quarter of a hectare. This could be visualized as a square with sides of 50m each, or the size of the roof of a large warehouse.
Where can I find out about other community solar projects?
A number of communities similar to ours are taking control of their energy generation. Some of the other groups around Australia include:
- Farming the sun
- Re-power Shoalhaven (NSW)
- Ranges energy Coop (VIC)
- Sydney Community solar project (NSW)
Besides solar projects there are community wind projects which are well underway.
How long is the energy payback?
Energy payback is the time that it takes a generator to produce as much energy as was used in its construction. This includes the energy in the manufacturing processes and site construction activities. Energy payback for photovoltaic (PV) solar projects in Australia ranges between 2 and 4 years.
How much water is used for cleaning the panels?
Panels do accumulate small amounts of dust. However very little water will be required. Natural rain water generally provides sufficient cleaning.