Case Study #6: Solpunkten Kristianstad (Sweden)

Author: County Administrative Board of Östergötland

Keywords: Shareholders, economic association

Overview

The solar park Solpunkten was established in 2020 by the local energy company C4 Energi owned by the municipality of Kristianstad, to promote interest in ecological and economic sustainability by providing renewable solar power. The solar park is in Kristianstad, at the lowest point (2,32 meters below sea level) in the southern Region of Skåne, Sweden. The conditions on these eight hectares of marshland are perfect for the purpose. The availability of sunlight is very high, and the land is not suitable for housing or as arable land. Kristianstad municipality owns the land and C4 Energi has signed a lease agreement.

C4 Energi owns two-thirds of the solar park and has sold one third to Solpunkten economic association where the members, who also are electricity trading customers at C4 Energi AB, have bought into shares. The association has a cooperative capital corresponding to 12,680 shares. One share represents 100 W, this corresponds to 100 kWh per year or just over 8 kWh per month. The shares in Solpunkten were fully subscribed on August 25, 2022. C4 Energi is themselves part of the economic association and handles the association’s administration.

Solpunkten won the “Solar award of Skåne” in 2021 with the motivation:

”An inspiring project that shows how large areas of land that are less suitable for cultivation can be used optimally for large-scale solar power. As the land is low-efficient as a cultivation area, the land use can still be made efficient with the help of solar cells, but the harvest consists of electricity instead of grain. Solpunkten is well adapted to the surrounding environment and the location alongside a busy road helps to raise interest in solar energy and draws attention to an otherwise rather anonymous area.”

Legal form

C4 Energi chose the organizational form of an economic association for Solpunkten to sell shares in the solar park and include more people instead of selling shares to a few big companies. The idea of the shares in the solar park is that they will cover part of the individuals’ or company’s own consumption of electricity but at the same time be sufficient for as many people as possible who want to be part of the energy transition. Therefore, C4 Energi decided on the distribution limit of a maximum of 60% of electricity consumption per shareholder.

In Sweden the economic associations follow the legal framework of the “Economic Associations Act (2018:672)”

For reviewing of Solpunkten economic associations’ annual report, accounts and the boards’ administration, an auditor is chosen from the association or outside of the association. They will follow the International Standars on Auditing (ISA).

In general, it is the Swedish Energy Market Inspectorate (Ei) that has as one of its’ main tasks to ensure that market participants comply with laws and regulations in the energy sector. Ei also monitors and analyses developments in the electricity, natural gas and district heating markets, and submits proposals for changes in regulations, or other measures, to promote the functioning of the markets.

Technological setup

Solpunkten consists of 9200 photovoltaic panels and each panel has a capacity of 435 watts. The photovoltaic panels are installed on the ground, and each panel measures 2,115 x 1052 x 35 millimeters and weighs 24 kilograms, they are monocrystalline solar cells with half-cells. The efficiency of the panels is about 19.5 percent, which means that just over 19 percent of the energy in the sun’s rays is converted into clean electricity. The total capacity of the solar park is 4 megawatts. One panel corresponds to just over 4 shares in electricity production. The panels come from LONGI Solar, which is one of the world’s largest manufacturers of solar panels. Solkompaniet AB has delivered and installed solar panels for the park.

The land where the park Solpunkten is located has reached its capacity for solar panels, but C4 Energi together with the economic association is looking for new locations for future development with more solar panels. Future plans are also to complement the production with batteries to enable storage and to steer production but also to provide ancillary services.

Solpunkten is connected to the local distribution grid with three substations and fiber connected to an operation center belonging to C4 Energi.

Maintenance and energy efficiency

Weather events such as storms and floods damaged some of the installations made in 2020. Hence, renovation work has been done, such as replacement of some of the panels and reinforcement of anchorage. The drainage was adequate from the start as the risk of flooding was predictable for the lowest point in the country.

The main purpose of the solar park Solpunkten is to produce renewable energy locally and sustainably so that it can be shared between more people. The set-up for Solpunkten means that production is at one end and consumption at the other without any relation to each other. Therefore, there are no active plans for energy efficiency for Solpunkten at this stage, but it can be a part of the future. However, the installation of solar cells followed meticulous planning and placement to create the optimal location and get the most out of each panel.

A possible development of Solpunkten, to create added value and to reduce shrub shade, is to let sheep graze by the panels. The land is prepared for this with cattle grid but there are ongoing discussions about this measure due to uncertainties in possible negative aspects such as damaged cables.

Governance

Solpunkten Kristianstad Economic association has statutes that, among other subjects, steer the associations’ membership, governance, responsibilities and how surplus from energy production should be distributed. A General Meeting is held annually no later than six months after the end of the financial year. At the meeting, each member, regardless of how many shares they have, has one vote. The right to vote shall be exercised by the member personally, through a representative, or through a proxy with a written and dated power of attorney.

The Board consists of at least three and a maximum of seven members elected by the Annual General Meeting. At least one member must come from C4 Energi, they can be seen as the general managing body. The members are appointed for a two-year term of office. For members who resign during their first year of operation, by-elections will take place at the next annual General Meeting. The Board has a quorum when more than half of the total number of elected members are present. At the Constituent Board Meeting, the Board appoints its chairman from among the members elected by the Annual General Meeting. The Board is responsible for the associations’ organization, management, accounting and care of the day-to-day operations. This includes continuously assessing the association’s financial situation and ensuring that the association’s organization is designed so that the accounting, asset management and the association’s financial affairs in general are controlled in a satisfactory manner.

The membership application is made in writing to the board, which then decides on membership and sustains the list of members. Each member shall participate with a stake for his or her membership in the association. Solpunkten was fully subscribed on August 25th, 2022. However, a unit holder can resell his or her share or sell it back to the association. The new owner must apply for membership of the association in writing to the association and sign an electricity purchase agreement with C4 Energi. Requests to resign from the association must also be in writing and be made following Chapter 4, 9§ of the Income Tax Act. If a member has transferred his or her contributions to another party, resignation takes place at the same time as the acquirer takes over the stake if the transferee is a member, or when membership is granted when the transferee is not already a member. C4 Energi buys redeemed shares if an external buyer cannot be found during the six months after the association has received a written request for this.

C4 Energi are responsible for the ongoing maintenance of the solar park via an agreement with the association, but the association can procure a new operator for technical maintenance. 

Business model

The main consumers of the energy generated by the solar park are the members (businesses and private individuals) of the association Solpunkten. Depending on the electricity production and the market price, the share price (deduction) per kWh will vary monthly. When the members receive their regular electricity bill from C4 Energi for their entire electricity consumption, the amount from their solar cell share is deducted from the invoice. Each member shall participate with a minimum of one share and a maximum of the number of shares corresponding to 60% of the members’ annual electricity consumption. C4 Energi owns the other two-thirds of the solar park, this means that other consumers of the energy generated are electricity trading customers of theirs. C4 Energi has also signed power purchase agreements with some smaller companies, mostly property owners, who thereby also are consumers of energy generated.

The association shall primarily finance its activities through the association’s paid member contributions. The association’s costs for administration and operation and maintenance of the photovoltaic system are covered by deductions from the income (market value of electricity production) generated by the members’ contributions. To cover part of these costs, the association also has the authority to sell the allocation of electricity certificates generated by the photovoltaic system’s electricity production to a buyer appointed by the Board. If additional needs arise over time, a service fee may be charged to the members at the discretion of the Board. The maximum amount is SEK 250 per member. Any service fee shall be paid in the manner, and within the time, decided by the Board. C4 Energi handles all other ordinary costs such as network transmission fee, state taxes and charges, energy taxes and electricity certificate for the electricity distributed to their customers.

The investment that was made to enable the building of Solpunkten consisted of a Group investment from C4 Energis’ own budget together with an initial investment that was expected to be repaid through the shares sold. The nominal intended value of each share is gradually reduced by 1/30 per year, as the park ages, so that the initial value after 30 years is set to 0. However, members are of course free to set a market value among themselves. For 2024, the nominal value for each share in the association (for 2024) is SEK 892 for a share volume of about 100 kWh/year. The price is considered as an affordable option and according to C4 Energi a “win-win” situation for both the buyer of a share and C4 Energi as an investor. Solpunkten have not received any public funding.

It can be expected to take about 8-10 years before the investment has paid off. The shares then provide a profit for the remaining period of the park’s expected lifespan of about 30 years, it can be longer. Aspects such as changes in tax regulation and electricity prices can also influence the investment.

Digital tools

The solar panels are fiber-connected to an operation center that is supervised by C4 Energi. There are sensors for each third of the park that measure insulation and production. The production of Solpunkten can be followed day by day, hour by hour – all year round Solpunkten produktion (c4energi.se).

The billing relies on the data management technology that C4 Energi has been using for a long time, so the data privacy should be same as before. As stated above, all who profit from the solar park must be electricity retail customers at C4 Energi, hence they have the information of each shareholder’s energy consumption and data from the solar park via sensors.

The park also has perimeter protection and anti-theft sensors.

Social inclusion

One important aspect for C4 Energi when initiating the building of the solar park Solpunkten and the economic association was to create positive, local engagement.

“When we, as the local energy company, work together with residents and businesses we create power that allows the community and municipality to continue to grow and develop,” Daniel Persson, Grid Manager at C4 Energi.

Solpunkten is part of community building through raising awareness of renewable energy, and solar cells in particular. C4 Energi themselves, but also in collaboration with other actors, arranges several study visits. The target group varies between visits, from private individuals to residents but also actors from other parts of Sweden with interest in the technology and other aspects of solar parks.

For example, the Swedish Society for Nature Conservation arranged a study visit together with C4 Energi with an extra focus on biodiversity aspects of solar cell establishment and discussions about the location of solar parks in a broader perspective. One recurring group at the study visits are students from Lunds’ Faculty of Engineering. The members of Solpunkten economic association will also be invited “behind the gates” to look at their investment in physical form.

This open discussion about the establishment of the solar park helps to create local acceptance for the “intervention” in the nearby nature. Curiosity and pride can also be positive outcomes of involving local actors in this type of development.

Barriers and challenges

C4 Energi were among the first in Sweden to build a solar park of this scale, it was still a relatively new area, and the general mindset was that of “testing a new concept”. The initial phase of building the solar park required expertise, thus, C4 Energi enlisted the help of consultants mainly for the technical aspects.

To communicate the possibility of becoming a member in Solpunkten economic association, C4 Energi created local events, information on electricity trading meetings, published information on their webpage and via C4 Energi’s own costumer magazine and the local newspapers. The actors already interested in this kind of investment jumped on board immediately. After the commitment of these 10 %, there came a period when it was more difficult to get shares sold. C4 Energi had to respond to several recurring questions such as the usefulness of buying shares and how it worked with shareholding. It took a lot of communication and dialogue to reach 20-25 % committed members. After this the “Ketchup effect” hit and enquiries to buy shares poured in from several of C4 Energi’s communication channels. This was partly due to the electricity crisis 2022 following the invasion of Ukraine. The electricity price rose, but the price of the shares remained the same. Owning shares was also a good alternative to installing solar panels on one’s own roof. It was also partly due to the increasing interest in solar cells and the growing trust in technology.

There is now a waiting list for buying shares at the customer service of C4 Energi, they are also helping buyers and sellers to get matched. However, this task is outside C4 Energi’s area of responsibility and should instead belong to Solpunkten economic association. One lesson learned is that the organizational form of an economic association requires a lot of commitment and effort. Some actors in the association must have the competence to run an organization and are willing to put effort into engaging the other members. It is C4 Energi that has taken on this role and responsibility for Solpunkten.

The establishment of Solpunkten did not face a lot of barriers, the timing was right for C4 Energi and the municipality of Kristianstad saw this as an innovative project. However, since 2020 the establishment of solar parks has largely increased, which means greater competition for land and connection to the grid. Conflicting objectives are also common nowadays with more requests to build solar parks on arable land, something that might need more actors involved before an establishment can get a permit.

References:

C4 Energi. 2024. “2. Medlemsinformation. Årsredovisningar och Stadgar.” C4 Energi. https://c4energi.se.
C4 Energi. 2024. “3. Vanliga Frågor om Solpunkten.” Vanliga Frågor. https://c4energi.se.
Energimarknadsinspektionen. 2024. “Vår Verksamhet.” Energimarknadsinspektionen. https://ei.se.
Naturskyddsföreningen. 2024. “Studiebesök Solpunkten.” Naturskyddsföreningen. https://naturskyddsforeningen.se.
Sveriges riksdag. 2024. “Lag (1987:667) om Ekonomiska Föreningar.” Sveriges riksdag. https://riksdagen.se.

Programme Manual Online

Choose