Majura Community Solar Project Q&A

Project FAQs

Q. Can I tell my friends, and can they apply after the 15th of February?

Yes, please tell your ACT-based friends, we would like to include as many ACT residents as possible in the farm. The 15th of February deadline is for people who have pre-registered to invest, to receive a priority allotment of securities. Please see page 14 of the Offer document for further details. After this date we will still be receiving applications and the Offer will be open to the broader ACT community. We would encourage you to invite your friends to apply after reading the Offer Information Statement.

Q. How does this compare to other projects?

While it is a sizeable project for the ACT, it will not be the largest by any means. As a comparison, it will be roughly 5% of the size of the array which is installed on the Monaro highway at Royalla.

Q. How many community shareholders are needed to raise enough money for the investment?

We estimate participation from 400 to 600 community members, with investments ranging between $1,000 and $10,000 per member.

Q. Why are the Director's all applying for 400 to 500 shares, is there a limit imposed on Directors?

Each Board member has made an individual decision regarding how many shares to apply for based upon their individual circumstances. There were no special restrictions imposed upon Board members - that is, they had the same conditions as everyone else with regard to the number of shares they applied for. The one director in the Offer Information Statement who did not apply for shares lives outside the ACT, and is therefore ineligible to participate in the offer due to the ACT Government requirement that only ACT residents can be allocated shares.

Q. How will it be maintained?

Maintenance will be contracted to a third party provider Epho, who will be responsible for important factors such as the timely replacement of any component that fails, in order to ensure that the system produces electricity at a consistently high level of efficiency and safety.

Q. How will the share capital be used?

The major portion of the shareholder investments will go towards setting up the solar farm, including equipment purchase and construction costs. The various components of the cost include civil works, installation labour, electrical work, grid connection hardware, cables, breakers, inverters and of course, the solar panels.

Q. How will SolarShare mitigate risks?

Please read SolarShare Offer Information Statement regarding the risks to the investment and SolarShare's mitigation strategies

Q. Are the Revenue Management Agreements mentioned in the Risk and Mitigation Strategies already negotiated? How standard are they? If they are not already in place, what timeline is planned for negotiation?

The CFD and the Deed of Entitlement have already been negotiated and signed with the ACT Government. It is envisaged that the spot-market pass through contract will be made with Enova Energy and discussions have already begun. This is a fairly standard contract and spot-market prices are a fact (rather than a negotiable number).

Q. What is the fundraising process? Where did the original $125,070 come from?

There are two investment rounds for the flagship project: "T1 Seed Funding" and "T2 Construction Funding". 20 ACT residents committed 125,000 of seed funding (dubbed Tranche one or T1) in the 16/17 financial year to allow the project to progress its development and approvals. These investors have been subject to a higher level of risk in their investments due the the higher level of uncertainty (at that time) in the plant’s ultimate completion. Investors in T1 received 10% more share for their investment. SolarShare was limited to 20 people for the T1 round, due to a rule in the Corporations Act, also called the 20/12 rule, which permits us to raise funds from no more than 20 people over a 12 month period by this fundraising mechanism. In recognition of the higher risk profile for T1, SolarShare offered 10 per cent more shares for each dollar invested in the initial round. For all other aspects, shares issued in the seed round will have the same rights as shares in the second investment round. The other $70 (7 x $10 shares) was contributed by directors and volunteers when the company was formed. Round two (T2 - main round) investors should inform themselves to understand and accept the Majura Community Solar farm’s risk profile that is detailed in the Offer Information Statement. It is important that you read and fully understand these risks if considering the main round. In recognition of the generally lower risk profile, T2 investors will purchase shares at $10.00 per share. The minimum investment amount in T2 will be $500 except for a small number of people who registered to invest $350 before the minimum was raised. The T2 investment round is open from 14th December 2018

Q. What are the main differences in risk between the seed investment round and the main investment round?

Investors in the main round (Round Two) will have the risk profile associated with owning an asset. This includes sunlight and climate variability, unforeseen site conditions during construction, and plant operational risks such as outages. As well as the asset ownership type risks above, seed round investors have three other important sources of risk to be aware of:
  • ACT Government policy relating to the Feed in Tariff may change, either as a result of the election or as a result of other factors.
  • SolarShare may not be successful in its application for the feed-in tariff.
  • SolarShare may not secure sufficient funding in the main investment round to proceed.
Both rounds have other risks than those detailed in this answer and it is important to read the disclosure information in the T1 Seed Funding (Round one) information memorandum and T2 Construction Funding (Round two) Offer Information Statement (OIS) thoroughly prior to making an investment decision.

Q. 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

Q. What happens if SolarShare receives more registrations than the value of the solar farm?

If the offer period results in an oversubscription, SolarShare will use reasonable endeavours to:
  • Allocate shares based on the date the investor originally registered their investment interest on SolarShare’s website, and the number of shares for which they registered.
  • If an investor applies for more shares than they originally registered for, allocating any additional shares only after all registered investors have been allocated their registered allotment, rounding to the nearest convenient parcel of shares.
  • If this still results in oversubscription, scaling back the additional shares allocated by capping the additional shares offered.
  • If the offer is still oversubscribed, board will determine the methodology of allocation of additional shares on a basis the board deems reasonable with consideration given to the objectives of the company.

Q. Who is investment in the T2 – Construction Funding open to?

Investment in T2 – Construction Funding will be open to all ACT Residents.

Q. Why is the investment in one company (SolarShare Community Energy Ltd) but it will be another company (Majura Community Energy Project) which has been established to progress the solar farm?

We established a parent and subsidiary structure for a few reasons, but mostly they stem from SolarShare’s vision of having more than a single project, and including other investors in these future project.
  • As the ACT Government is supporting the Majura solar farm, they have required us to make sure that:
    • Proceeds from the Majura plant do not unduly subsidise future projects that we may pursue, that may include investors outside the ACT; and
    • the risks of conducting future projects are ‘ring-fenced’ and a poorly performing future project would not be able to affect the returns of someone participating in the Majura solar project.
    We proposed a variety of methods to the ACT Government on how this could be achieved, and the Government’s preference was that we establish a separate share class (within SolarShare community Energy ltd) and link this to a subsidiary company, such that shareholders in that share class are the only members of SolarShare who could benefit from the proceeds and operations of that subsidiary company (Majura Community Energy Project pty ltd).
  • The Subsidiary company also facilitates potential use of secondary capital sources (debt and/or underwriting equity) to make up the capital requirement of the farm. A debt provider would potentially seek step in rights in the operating company (the subsidiary), so it would not be fair on investors in future projects if a debt provider also took security over the parent company.
We unfortunately would not be able to have all community investors invest directly in the subsidiary, as it is a private company and private companies are limited to 50 shareholders. The alternative of making this subsidiary company a public company with community investors investing directly into it would lose the benefits of being able to carry out multiple projects under the one structure and forego some of the democratic values under which SolarShare was established.

Q. Can a new Government in the ACT reduce the feed-in tariff rate once it is awarded?

Changing Government policy is within the powers of all Governments.To date no Government has retrospectively changed, nor has noted any public intention to retrospectively change, any renewable power generation FiT support Act in the ACT. SolarShare’s Board considers this an unlikely action for any government as to do so would risk undermining the trust that investors need to place in government decisions to ensure a stable investment environment.

Q. As the feed-in tariff is 19.5 cents for 20 years, does SolarShare have to sell all power to ACT Government only?

We will sell the power to the wholesale electricity market at the prevailing half-hourly spot price, via our partnership with a registered market participant (Enova Energy). The ACT Government’s feed-in tariff policy means the Energy distributor (Evo Energy) will pay the difference between the wholesale price and the 19.5 c/kWh feed-in tariff for all the electricity sent to the market. The feed-in Tariff removes our exposure to the highly volatile spot market, giving us a fixed price and certain price.

Q. Can you provide further details on the Community Energy Retail Product?

Please see pages 21/22 of the offer information statement for the description of the community energy retail product. We are currently working with Enova as they update their billing system to accommodate this kind of collaboration.

Q. Where does the electricity go?

Physically, the electricity leaves the farm via an electricity meter, and enters Evo Energy’s distribution network.

Q. Is the 19.5 cents per kilowatt hour feed-in tariff guaranteed for twenty years?

The ACT Government feed-in tariff creates a contract between us and Evo Energy (Previously known as ActewAGL distribution). It is also worth nothing that ActewAGL distribution is 51 per cent owned by the ACT Government.  Within the feed-in tariff deed there is also a treasury guarantee that stipulates that if a future Government were to repeal the legislation then the ACT Treasury would pay the amount of the guarantee.

Q. 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. We have budgeted for decommissioning, however pending reaching an agreement with the farmer for continuing the lease and securing a suitable ongoing off-take agreement it will be feasible to upgrade the equipment and continue operating, noting that the ACT Government Feed-in Tariff would not be expected to continue beyond the 20 year period.

Q. Will there be an insurance policy?

Yes. SolarShare has insurance quotations that covers operational risks to the Majura Community solar farm site and related liabilities. SolarShare’s insurance does not cover investors’ funds.

Q. Is there individual shareholder liability in the fundraising rounds?

There is no individual shareholder liability. However, any investment is not without risk and it may be appropriate to seek independent advice if unsure.

Q. If there is a bank loan to assist with the financing, will interest paid on the bank loan be higher than the return from the solar farm?

The interest rate expectations we have been given from banks are lower than SolarShare’s current financial model’s estimated rate of return.

Q. Is there a plan to establish a line of credit even if the capital raising is sufficient? Does this materially impact on project costs?

The board is considering the benefits of establishing a loan against this project, with the benefit that we would establish a credit rating and be able to borrow against future projects However we will act in the best interest of shareholders. In the sensitivities table on page 29 we consider the impact of $250,000 debt, and have calculated the impact on return to be 0.01%.

Q. Why does a 10% change on the farm operation costs ($20,300) lead to a greater impact on IRR than a 10% change on organisations costs ($77,200)?

This question has helped us uncover a small error in the document, and we do apologise. The average values listed in the descriptions in the right hand column are incorrect: they should read:
  • The costs of maintaining the farm are increased by 10% from an average value of $42100 SolarShare’s organisational overhead is increased by 10% from an average value of $16700
  • The percentage change in IRR as reported in the document, as a result of the 10% change in actual value of either one of these items, is nonetheless correctly calculated.
We note that the resulting change in IRR as a result of the farm operational costs is 4.4x the change in organisational overhead. This is despite the average annual farm operational costs only being 2.5x the annual organisational costs. The reason for this is that the organisational costs are somewhat front-loaded in the life of the project, and since IRR is a metric which takes time value of money into account, a blanket 10% increase on these costs has a disproportionate effect on the IRR.

Q. What is the estimated construction time? Will the solar farm come online straight away or in stages?

Once begun, construction will only take a few of months, however in our timeframe we have prepared for a slower construction process in case of delays. As soon as it is built it will be connected to the power grid, and as soon as it is connected to the power grid it will start generating an income. It will be connected and turned on as a single unit.

Q. Will it be possible to track online the energy generation in real time?

Yes, this is already done at other sites that Epho have developed and constructed. This will be easy to do when we set up the solar farm.

Q. What are the terms of the sub-lease on the winery’s land?

It is a 21 year sublease, indexed to CPI. It will be a registered sublease and therefore has similar legal standing to the ACT Government lease the winery owner holds over their land.

Q. What will be ongoing operating expenses after construction of the solar farm is completed?

Maintenance costs, the lease, insurance and interest on the loan facility (if needed) are our largest expenses. The system will be electronically monitored so we will be able to track the energy production against the expected energy production. This means our maintenance provider will immediately be able to see if something is not right. We intend to keep the option run sheep under the panels to keep the grass down. Cleaning will not be necessary unless something unusual occurs – such as a flock of birds laying droppings on the panels or an unusual dust storm. The panels will be tilted so that rain will easily clean the surfaces.

Q. Can you provide further information on the possible use of sheep grazing and associated contractual/financial arrangements?

Prior to its use as a solar power facility, the block of land has had sheep on it from time to time, and the solar system has been specified to allow us the option of running sheep under the panels. This includes ensuring cabling is sufficiently high above the ground to be out of reach, and that landscaped areas are fenced off and not accessible by potential grazing livestock. At this stage the main consideration has been to keep this option open for us in the future. There is no financial or contractual relationship that we have entered into with any specific grazier at this point it time.

Q. Other than sheep grazing under the panels are there other supplementary activities that could be conducted on site?

We have not planned for any other activities, the Board would need to consider the risk that any supplementary activities may pose to the operation of the farm. There will be landscaping on the site for visual amenity and furthermore we will be making contributions to the Majura valley landcare group for additional plantings in their efforts to foster the Majura valley as an entry point into Canberra that embodies the bush capital feel.

Q. As technology improves over the life of the farm, would this potentially enable greater use of the available sunlight? Could the ACT Feed-in Tariff deed be adjusted to take advantage of this newer technology?

We will be able to replace and repair aspects of the farm over the farm’s life, and replace old for new. But any additional energy generation capability arising from this would only be able to be realised within the parameters established by the ACT Feed-in Tariff deed. We expect there would be very little appetite from the ACT Government to change the deed. The deed defines:
  • The number of panels we can install
  • The instantaneous AC power generation capability of the plant
  • The total annual energy for which we can receive Feed-in Tariff support payments
  • The location of the plant.
Within these constraints it would be technically possible for us to moderately improve our capacity factor. If for example tracking technology became cost effective for the site, this would enable greater use of the available sunlight in the mornings and evenings. At this time however, commercially proven and bankable tracking technologies are not practical due to site constraints.

Q. Is the 1MW size limitation set by government or by some other factor?

The primary reason for this size is the Government’s imposed 1MW limit. We could build a larger farm however we would sell at wholesale prices without any feed-in tariff support.

Q. Have you undertaken any scientific testing regarding glare affects from the solar farm to residents, motorists, aircraft and/or pilots and if so, what are the findings of those tests?

The NCA requested applicants engage services of a suitably qualified professional to prepare an air safety study which would assess the glare and reflectivity of the proposal. The reports were ‘The Mount Majura Solar Farm – Glare Analysis’, prepared by CBRE and ‘Solar Glare Aviation Hazard Evaluation Engineering Report’ prepared by Canadian Solar – based in Canada and both reports concluded that whilst some level of glare is to be expected from the solar arrays, the impact of this glare to surrounding land uses, vehicles or aircraft is ‘low potential’ and not likely to be hazardous.

Q. What are the social dividends of this project for the local economy?

There is evidence that a community owned project generates 7 to 9 times the local economic impact compared to a project owned by external financiers outside the local area. This is because the proceeds for the activity go back to the local community1. We also have small collaborations planned with the University of Canberra and the ANU for honours or graduate students to undertake further study into our project and use the project data for their research. [1] Original Report: Bell, J; Booth, E (2010) The economic benefits of on-farm energy clusters in Aberdeenshire, SAC consulting Australian context: Nichols, R (2011) Renewable energy as an alternative farm income, Nuffield Australia Project No 1104

Q. When Renewable Energy Certificates came into operation they were an incentive to develop renewable energy. When the certificates were sold, the offset provided to coal powered generators was greater than the actual reduction in greenhouse gases of the electricity being produced by renewables relative to coal. Has this been considered by SolarShare?

Firstly, the development of our solar farm was a commercial response to the ACT Government’s renewables policy offering a Feed-in-Tariff (FiT) to incentivise investment in renewable energy generation to meet the ACT’s target. So, in response to your question SolarShare has not directly examined the policy drivers underpinning the Federal Renewable Energy Target as part of the decision making process to develop the solar farm. More broadly, we would direct you to the Australian Government website which explains the scheme The key aspect is that a Large-scale Generation Certificate (LGC) represents 1 Megawatt hour (MWh) of energy generated from an eligible renewable energy source (such as the solar farm we are developing), and these certificates can sold to entities - usually electricity retailers - who surrender them to the Clean Energy Regulator to meet their obligation to source a certain percentage of their customer’s consumption from renewable energy sources. The balance of the retailer’s customers consumption is met from other generation sources including coal-fired generation.

Q. Does SolarShare's plant count towards the ACT Government's 100% renewable energy target?

The ACT Government is facilitating the building of SolarShare’s solar farm by granting a Feed-in-Tariff (FiT) and, as a result contributing to the ACT Government's 100% renewable electricity target. Under the FiT the ACT Government pays for 100% of the electricity sent out from the solar farm at the FiT’s fixed price, but unlike other FiT grants, does not receive the Large-scale Generation Certificates (LGCs) created by the solar farm. The LGCs created are owned by SolarShare and are intended to be sold to create additional revenue. The FiT represents the large majority of the solar farm’s economic value. The LGCs will provide a small contribution of the economic value of the project, and validate the output as new renewable energy. Once sold, the LGCs will usually be used by a liable entity under the RET such as an electricity retailer who then surrenders them to meet its liability; or less frequently, voluntarily surrendered or held. Every retail electricity customer, including those in the ACT financially contributes to the renewable energy target when they pay their retailer’s electricity bill.

Q. Can sign up for the minimum no. of shares first and then buy more at a later date. If this is allowed could you please let me know the procedure as well?

Yes, subject to availability of shares and noting that the capital raise closing date. Note also that Solar Share will likely have capital raises for further projects. Unless the closing date is extended, you will not be able to buy more shares after the closing date unless you purchase them from another investor who wishes to sell their shares.

Q. How was the expected 4-6% return rate calculated and what are the future possibilities and/or projects that would increase this?

A. The expected return rate is calculated by SolarShare considering the solar farm running costs and company overheads for the life of the farm, and the revenues from:
  • the Feed-in Tariff (FiT);
  • the avoided Transmission Use of System (TUoS) revenue; and
  • the sale of Large-scale Generation Certificates (LGCs).
Solarshare intends to build other projects, with different rates of return. However, due to ACT Government restrictions, additional project will not be part of the FPAS Share Class, as the ACT government requires us to ensure that the benefits from the Feed-in Tariff are for ACT residents. As a result, only the Majura Community Solar Farm will contribute to the returns for FPAS (Flagship Project Asset Specific) shares. The Offer Information Statement section on financial modelling includes further detail on what scenarios may increase or decrease project returns.

Q. Can you demonstrate the annual feed-in revenue calculation noting the plant is 1MWac, annual generation is expected to be 1486kWh/kWp and the feed tariff is 195.6

The figure of 1486kWh/kWp is a related to the DC capacity of the system (denoted by kWp or ‘kilowatts peak’). The proposed system is a 1.26MWp DC array connected via a 1.0MW AC connection. The annual revenue is therefore calculated by (1486*1.26*0.1956 = $366k pa). It is not unusual to have a DC array with a greater capacity than the AC capacity as there are some electrically losses between the DC and AC circuits and the oversized array enables the AC connection point to be used at its maximum capacity for a longer period throughout the day and across the seasons.

The offer document models a capital return for each year for each $10 security, the sum of these capital returns adds up to $9.77.

Q. Is there a reason this does not total the full $10?

The ability for the company to return capital is related to the cumulated profits and cash flow. We expect that we will only be able to return capital after all profits are distributed as dividends, and will need the ruling from the ATO to determine the mechanism whereby capital returns occur. Assuming that we receive a ruling, we predict that we will be able to return less than the full face value of the shares as capital.

Q. Are the quoted percentage returns in the offer document what an investor could expect to receive each and every year? Is this percentage relative to the initial capital invested, or since capital is planned on being returned over time is it relative to the reduced capital base at the time of the dividend?

The modelled 5% return is the annualised return over the 20 year life of the farm, relative to the initial investment made. This is calculated with formula called an ‘internal rate of return’. The internal rate of return on an investment or project is the "annualized effective compounded return rate” (from Wikipedia). This is the average return rate on the initial investment over the 20 year period of the offer. Over the life of the farm, some years will have higher distributions and some years lower, for example distributions will be lower when we are establishing a sinking fund for equipment replacement for example allowing for inverter replacements at or around year 10 of operations. The 5% internal rate of return therefore is a means of averaging out the ups and downs to present a single figure. We note that as capital is paid down, the same dollar value dividend would represent a higher percentage proportion of the now reduced capital base. This would have the effect of making the percentage returns appear higher in latter years. In the Offer Information Statement we have chosen to present the returns figures relative to the initial investment you make, and thus as a percentage they will appear lower than if you consider them relative to the decreased capital base. Please see page 24 of the offer document for our base-case modelled return stream combining both capital returns and dividends. Note this table is presented as $ per security and not as percentages.

Q: Can I choose to take my dividends Unfranked?

A. Currently SolarShare does not have firm plans to offer choices of converting franked into unfranked dividends to investors, but we will consider this, noting that we will not be able to change the value of the dividend regardless of the franking status. The company intends distribute as much profit as possible as franked dividends. The table on page 24 of the current Offer information statement shows the amount of franking credits that would be received each year

Q: What timeline is planned for a private and/or class ruling from the ATO on capital returns? Can you explain further the capital return option vs the franked+unfranked dividend option?

SolarShare have been instructed to seek a ruling on capital return prior to the first distribution. We have currently assumed that capital returns are possible, and have used these to calculate the return to investors. In the case whereby capital returns are not possible, we would return all returns as a combination of franked and unfranked dividends. There is a non-material increase in the amount of franking credits issued in the case whereby all returns are done as dividends, resulting in an increase in the investment return, however the effect on individuals would need to take into account individual circumstances.

Q. The offer document refers to potential reinvestment of income in other projects is noted. Would this be an individual choice or a choice determined by the entire share class?

Reinvestment may occur in a number of ways. Individuals may choose to reinvest their dividends by participating in future capital raises by the company, or re-investment would be determined by a resolution at a General meeting of the company.

Q. Is there a Dividend Reinvestment Plan (DRP)?

We are aware that there is an option to select this in the application form but please note there is no dividend reinvestment plan for this offer of securities. Unfortunately the application form is determined by our registry provider Registry Direct and we are unable to remove this section from the form.

Q. On the application form there is a box to put in an SRN if they have it. I have one but it is of a different format

If you don’t have an existing SRN and/or your existing SRN is of a different format then leave this blank in your application.

Q. Other competing companies are expected to setup their own solar farms in the near future won't they then reduce/eliminate purchasing from Solarshare? What impact will this have on the investment return?

Other solar farms being developed will increase generation supply in the energy market. This may, to some extent, impact electricity prices and LGC prices. The investment return from our solar farm are largely hedged against market price movements by the ACT Government’s fixed price Feed-in-Tariff, which represents the majority of the solar farm’s revenue. In addition to the FiT, SolarShare retains the LGCs created by our solar farm, and these are intended to be sold at prevailing market prices. LGCs are forecast to represent a small revenue source As a result, our exposure to changes in energy market prices is minimal.

Q. Would a change of Government in the ACT, less predisposed to renewable energy policy, be a risk for the solar farm and its investors.

Please read the offer information statement page 35 for information on sovereign risk. The Feed-in Tariff tariff deed also contains a treasury guarantee which would be paid by the ACT treasury to the project if a law change in the future was detrimental to the project.

Q. How do you reconcile the difference between FiT price and market price?

The market price is published by the Australian Energy Market operator. During a period our electricity meter will record the quantity of electricity generated and the time of day. This, combined with AEMO’s market price, determines how much the difference is between what was earned on the electricity market and the Feed-in rate. This difference is then made up by the Feed-in tariff, also known as a contract for difference.

Q. What happens if I move outside the ACT after investing?

When you invest in the Flagship project (Majura Community Solar Farm) you must be a resident of the ACT, or be a company with a registered address in the ACT. After investing, if you change to an address that is not the ACT, you can keep your shares. The restriction regarding addresses only applies should you wish to sell your shares in the first three years after they were issued, in which case you must sell the shares to a resident of the ACT, or a company with a registered address in the ACT. Subsequent to this 3 year period, this restriction is removed, and shares can be sold to any person or entity with an Australian address.

Q. What would happen to any SolarShare shares in the event of my death. Can I leave the shares to my relative, who is resident in the ACT? What would happen will happen my relative is not an ACT resident, or moves away from the ACT at a later date?

With regard to estate planning, SolarShare shares are the same as any other share - they can be bequeathed to a relative or third-party. The only restriction, which is placed on us by the ACT Government, is if the bequeathment occurs in the period up to 3 years from when the shares were issued initially, then the beneficiary must have an ACT residential address at the time of the bequeathment, or in the case where the beneficiary was a company, have it’s registered office in the ACT at that time. If the bequeathed party does not live in the ACT, the executor of the estate would be able sell the shares (to an eligible party). There is no restriction on a person owning securities if they leave the ACT after becoming a security holder. They do not have to sell the securities if they move outside of the ACT.

Q. Can I apply for securities for my ACT resident children or grandchildren who are under 18 years of age. How would I go about this?

If you wish to apply for shares for grandchildren and hold them on trust, please use a seperate application for each child with the trustee nominated as the owner of the shares for example "Mary Susan Jones ATF Gillian Mary Price". However, if the grandchild is under 18 we strongly recommend speaking to your accountant and the child's parents before making this decision. This is because unearned income of children under 18 is generally taxed at a penalty rate. Further, the child may be required to start submitting tax returns. The ATO website has some general information on this topic which may be helpful. As there are exceptions, your accountant or financial planner will be able to comment on your own particular situation.

Q. Is the Feed-in Tariff (FiT) indexed to inflation or otherwise?

The FiT is not indexed.

Q. Can you provide further details on the potential use of funds for "increase the Company's working capital to support ongoing activities"?

The company intends to maintain a suitable working capital balance as a bank balance to cover day to day operating expenses, including management of cashflows relating to the timing of GST payments and settlement of our revenue from the CFD and spot market pass through. We have allowed for $100,000 as this amount.

Q. Isn't amortisation of assets for tax purposes linear over life expectancy? The projected returns and proposed delayed creation of a sinking fund seem to be taking a different approach for amortisation. Can you provide further details? h3>

We are depreciating assets linearly over their lifetime. We have 2 pools of assets, one being the inverters with a 10 year lifetime, and the second pool being the remainder of the farm, including panels, mounting structures, wiring etc. with a 20 year lifetime. The sinking fund will be created as a preparation for the replacements of the inverters after their 10 year lifetime expires, during which time we will increase our working capital bank balance until the expenditure occurs.

Q. Industry experts have recently quoted cost for construction at market rates of approximately 1USD/Watt, Why is more capital than this required in the fundraising?

Firstly, to compare figures we need to convert these figures into a consistent use of Australian dollars and Watts Peak (DC wattage of the plant) as usually plant sizes are quoted in their DC capacity. Our planned plant at Majura is 1.26MWdc. The AUD is currently around 0.71 USD. This places the benchmark price of $1USD/W at around $1.40 AUD/W. The base construction cost from our contractor is $1.99million, or $1.56/Wdc. This is higher than the benchmark price of $1.40. The reasons for this are that we have chosen a reputable contractor and specified good quality componentry, and that we are relatively small for a utility scale project and do not achieve all the economies of scale of larger plants. There are also some costs not related to the size of the plant:
  • 199k of construction contingency (10% or 16c/W);
  • 255k of grid connection costs (20c/W);
  • 167k of site development costs and approvals including securing the lease via lease option (13c/W);
  • 78k of Approvals, landscaping, quality assurance and certification (6c/W); and
  • 56k establishing the community ownership structure and conducting this fundraising round (4c/W).

Q. How was the EPC firm Epho pty ltd selected to construct the plant

SolarShare conducted a tender process and invited leading solar construction companies that specialised in small scale utility plants. Epho, Epuron and Canadian Solar were shortlisted, and Epho's bid was determined to be the best value for money.

Q. Are you locked into Epho as the builder for the farm? Could you put this out to tender? Do they have monopoly provider power in providing the construction services to the farm?

We have an agreed term sheet with Epho but have not yet signed a contract, at this point in time we could select an alternative provider, however would need to consider the significant efforts that Epho have already put into this project.

Q. How would increased leverage (debt) change equity returns?

In the case of increased debt, we have used the scenario of $250,000 of debt for the farm. When we calculate the cost of establishing this debt facility, and the interest repayments, the cost of this capital is slightly greater than the projected equity returns with no debt, and as a result the equity returns are decreased slightly, by -0.01%, when debt is considered.

Q. What guarantees will the contractor be providing on completion, timing, performance and cost?

The following measures and guarantees have been negotiated:
  • Completion will be guaranteed by means of a bank guarantee over the works and the construction contractor, Epho’s group holding company (parent company) providing a parent company guarantee;
  • Timing of the plant delivery will be set in the contract, with liquidated damages to be incurred by the contractor for late delivery;
  • The primary performance (output) guarantee will be what is called a ‘performance ratio’. This measures sunlight coming into the plant by means of a weather sensor and guarantees a particular conversion ratio between inputted sunlight and generated output; and
  • The contact will be a fixed price delivery, with the contractor taking the currency risk.
In addition to the contractor’s guarantees, the contractor is required to procure major equipment items such as panels, inverters and racking with suitable manufacturers guarantees.

Q. What are the CO2 emissions from the the materials and construction of the farm?

We have not calculated the emissions associated with the manufacturing and construction of the solar farm.

Q.Is a further Environmental Impact assessment required beyond the study that has been completed? Has a site survey been done that can provide adequate basis for site restoration at the end of the project? What is likely to be required for site restoration?

No further assessment is required and there are no specific requirements in the assessment or approval relating to site restoration. The restoration that SolarShare intends to carry out at the end of the project life is related to any landowner or subsequent lessee need for the land to be returned to pasture. This would involve removing the solar panels and mounting structures. Trenched cables and the transformer would remain in place. The environmental assessment conducted by NGH and other approvals documents are available on our Majura valley community solar farm page

Q. Note 1G says site restoration costs are amortised over the expected life of the project but the financial modelling includes a separate charge for decommissioning. Are these consistent?

Site restoration costs are not amortised over the expected life of the project. Note 1G states that “Costs of site restoration are provided for over the life of the project… and are included in the costs for that stage". Put another way, at each stage of the project, any costs necessary for site restoration have been considered and included. The costs for decommissioning are assumed to occur within 1 year of abandoning the site, as detailed in the final paragraph of Note 1G.

What are the outcomes from the community consultation that has already been undertaken?

Community consultation already undertaken has led to letters of support from a range of local groups including Majura Valley Landcare, Molonglo Catchment Group, Friends of Mt Majura, Friends of Grasslands, and Christians for an Ethical Society. Copies of some letters of support are at our Majura project page

Q. What other events will there be to bring the SolarShare community together?

  • There will be an opening of the farm when construction is complete.
  • Our AGM is held each year in October.
  • Most years we also host a Christmas party.
If you would like to suggest an event please let us know at