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November 22, 2011 / Mike Piskur

The Community Energy Revolution

Despite all of the gloomy news about climate change – that carbon emissions hit record levels in 2010 and that rich nations won’t reach a global climate agreement until 2020 – there is reason for optimism about the future. Communities, companies, and the crowd are powering the post-carbon transition even as governments vacillate and the world’s biggest polluters press on with business as usual.

A number of innovative and potentially transformational clean energy projects may change the way we generate and finance energy. Community supported energy is inherently democratic and provides the counterpoint to the centralized system currently in place. Locally owned, distributed renewable energy generation transforms the average person from a passive consumer into an active and engaged investor. Community-owned energy creates much larger economic benefits than utility-scale generation. According to John Farrell of the Institute for Local Self-Reliance, “locally owned renewable energy projects have an economic impact 1.5 to 3.4 times higher than absentee owned projects.” In this era of extreme market volatility and minuscule interest rates, community supported energy can provide a better and more reliable rate of return than stocks and savings accounts. Perhaps most importantly, community and/or crowd funding creates new means of financing for energy models that may not fit the bill for traditional methods like venture capital or bank loans . Here are several examples of community supported energy:

  • In California, Solar Mosaic uses a platform much like Kickstarter to channel crowdfunding into community solar energy projects. People purchase solar panels that are installed on the roofs of community center, nonprofits, places of worship, and small businesses. The building owner signs a 20-year lease to buy the energy with the option to purchase the panels after seven years. The revenue pays back investors, with any additional money applied to other community solar projects.
  • In Washington State, Tangerine Power offers several options for people to invest in solar panels on their homes or other buildings in the community. This service focuses on group buying and simplified solar installation for homeowners. Community projects require a $1,000 investment that is repaid after ten years. After that, investors elect to keep the array, sell it to the local utility, or dismantle it.
  • In England, Ovesco constructed a 98kw solar power station atop Harveys Brewery in the town of Lewes. Community funding paid for the entire £307,000 project, which offers a 4% return on investment. Unfortunately, current securities laws prevent this model from coming to the US.
  • In Ontario, Canada, the SolarShare community bond program provides a 5% return over 5 years on a $1,000 investment. The funds pay for community solar energy projects throughout the province. Again, quoting John Farrell, “The SolarShare cooperative already operates 18 solar projects with a combined capacity of 600 kilowatts (enough power for about 130 homes).  The program could grow rapidly, once the bond program gets its regulatory approval and removes the $1,000 cap on investments.” Again, this model isn’t possible in the United States.

These models share some similarities but also differ in fundamental ways. All have the potential to revolutionize energy, though only time will tell which, if any, are successful. Much of the excitement comes from the fact that communities and entrepreneurs are inventing and perfecting locally owned energy as they go, and that everyone involved, from the person who creates the scheme to the individual looking to invest in their community and the clean energy industry, has a say in creating a democratized renewable energy infrastructure. This is uncharted territory: never has so much been at stake, and never have so many been able to shape the future.

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2 Comments

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  1. Lisa / Nov 23 2011 15:35

    Great optimistic post Mike, thanks for including Solar Mosaic!

    • Mike Piskur / Nov 23 2011 19:08

      Thanks for reading, and thanks to Solar Mosaic and the other community energy developers for giving me reasons to be optimistic. And anyway, pessimism will get you nowhere.

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