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Crowd-power invited to fund army of sub-2MW PV plants

Komo Energy is looking to fund up to a hundred 500kW-2MW stand-alone solar farms supplying into the grid by offering shares to the public.

Part of the appeal of solar is that it is so scalable. A tiny little strip of PV cells may help power a calculator while hundreds of thousands of modules can make up a solar farm capable of hundreds of megawatts of output.

Delivering solar projects of varying sizes is another matter. Solar farms under 5MW are easier to get approved, requiring less effort in compliance with the Australian Energy Market Operator for a start, but for most people the only obvious route to owning PV is to have it plonked on their rooftops. That’s a popular option in Australia, where nearly 25% of houses host solar arrays. It means many others who feel inclined to directly own a piece of clean energy generation can feel left out.

This middle-ground in solar is ripe for development, which is why renewables company Komo Energy is looking to fund up to a hundred 500kW-2MW stand-alone solar farms supplying into the grid by offering shares to the public.

Nimble is nice

Smaller-scale solar projects allow for a greater flexibility in investment style, says Komo Energy director and head of marketing strategy Jonathan Prendergast. “They can be more innovative at this scale compared with 100MW scale,” he says.

Komo Energy’s first project is a 1.8MW solar farm with 800kWh battery in Goulburn, NSW, developed in collaboration with Community Energy 4 Goulburn. The second is the 1MW Haystacks solar farm in Grong Grong, NSW, to be developed in partnership with community energy brand Pingala and the Community Power Agency. Investments in Haystacks are available in 3kW blocks.

There are many ways to fund a solar farm, Prendergast says. For example, as long-term investors and owners are attracted to projects, those payments can be used to fund the early stages of subsequent projects. “That’s a more organic model,” Prendergast says, where two projects one year might ease the way for five the following year and 10 the year after that.

Komo is looking to accelerate that pipeline using outside investment, targeting “everyday Australians” who might otherwise feel left out of the transition to clean energy. Its first equity offering will launch October 28 through Birchal equity funding.

The risks

Funds from the equity raising will go into early stages of projects, Prendergast says, “to fund the engineering, planning and other costs to get these to investment readiness, but we would love for the actual assets – solar farms, solar and battery power stations – to be crowd-funded separately in the future.”

“Everyday Australians” who want to take up the offer will need to be aware of the risks of an equity investment in an unlisted company. There is plenty of risk in buying shares in companies that are listed on the Australian Securities Exchange but the advantage is that investors can see what’s happening in the market, with trading levels and share price visible to all.

“What we hope to see is a like-minded group of investors coming in who are not only returns-driven but purpose-driven,” says Komo Energy director and head of project services Gerald Arends.

It’s a speculative space, to be sure, where the fledgling company’s value is derived from estimates of revenues from yet-to-be-realised projects.

“It is a higher risk investment than a yield investment into an actual solar farm,” Arends says.

Early-stage investors attracted via crowd-funding might hope to realise a return on investment down the track as further funding rounds are completed or if the company chooses to list on the exchange, Prendergast says. “If someone wishes to sell their shares they can speak to us and we can offer to buy them out.”

The intermediary platform chosen by Komo, Birchal, is looking to create a secondary market where investors can trade, he says.

Army of opportunity

Arends sees the market for sub-2MW solar as a shining opportunity for the PV industry. He tells a story of working on single-digit-megawatt PV projects in Europe before coming to Australia to work on a government-funded project in NSW proposed as 140MW but realised as 40MW.

What might have happened if the government had instead decided to build 140 separate 1MW plants spread across the state, he wonders? “You would have a thriving industry; you would have multiple contractors, multiple planning consultants, engineers that are familiar with setting up solar farms and driving down the costs – that’s the vision we have,” Arends says.

“For us it’s about building an industry rather than doing individual projects. We want to see a multitude of participants in the market who work together to deliver solar farms at a lower cost in more regional locations and in a more accessible way.”

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