The return on a £2m investment planned by the county council in the Merston Solar Farm project does ‘not look particularly good’, according to some councillors.
West Sussex County Council is proposing to take an equity stake in a community benefit society, which would own the solar farm off Pagham Road, along with Meadow Blue Community Energy (MBCE), which raised almost £1.5m in a share offering late last year.
As well as a £283,000 return, the council would also have a say in where community benefit funding, projected to be around £4.5m, part of which would be spent supporting future energy reduction and fuel poverty projects in West Sussex.
But members of WSCC’s Performance and Finance Select Committee questioned why the return was so low compared to the £5m Tangmere Solar Farm completed last year, which is expected to more than double the council’s investment over time.
Steve Waight (Con, Goring) said a return of £283,000 over 16 years did ‘not look particularly good’, and pointed out that their money was vulnerable if the scheme experienced any problems, as they were providing an investment not a loan.
He added: “I struggle to understand really why we do not just build a Tangmere-type solar farm.”
Louise Goldsmith (Con, Chichester West), leader of the council, explained that the project in Merston was slightly different to the Tangmere Solar Farm as if they had to buy the land near Merston the costs would be skewed.
She said: “It’s a different one. It’s a challenge for everybody but there’s merit in it.”
She revealed they were in discussions with a company about another project near Chichester, and added: “There are still pockets of land we are looking to put solar farms on.”
Officers explained that the costs of borrowing the £2m had been factored into the return the council would receive from its original investment.
Brad Watson (Con, Nuthurst and Southwater) said they had to be ‘absolutely certain’ there were safeguards for £2m worth of public money, while Peter Metcalfe (Con, Kingston Buci) ‘found it difficult to feel comfortable’ with just a £283,000 return with ‘no real handle over the costs’.
Sandra James (UKIP, Bourne) added: “Overall I do not think this is such a good robust plan at the moment.”
Jeremy Hunt (Con, Chichester North), cabinet member for finance, said WSCC was looking to get more than a single vote, given the scale of its investment, including a power of veto.
He described it as a ‘very good investment’ if councillors took into account the £4.5m that could be paid out of the community benefit fund.
Officers told councillors that the project was working to very tight timescales as it had to be up and running by the start of June to take advantage of the more generous Feed in Tariff (FIT), which is paid when electricity is fed into the national grid.
But it would be brought back to the committee later in the month when a due diligence report had been completed by Close Brothers, who were providing £3m of debt finance towards the scheme.
Mrs Goldsmith said there was merit in bringing proposals to committee for feedback while discussions were still going on.
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