Community Solar: The Next Big Thing in Australia Renewables

The momentum for a big push into community solar projects appears to be gathering pace, with several different organisations planning public launches in the next month, and suggestions that several dozen projects could be built on NSW rooftops in coming years.

Among plans revealed this week are the launch of a community solar network Farming the Sun in the northern Rivers region, to be followed soon by similar groups in New England and the Riverina. This is the work of community energy advocate Embark and Starfish Enterprises, which has identified 7 different projects of at least 80kW that could be commissioned in the next 18 months.

A Newcastle community group has also emerged with a plan to launch a “crowd-funding model – similar to that used successfully by Mosaic in the US – to develop projects in its region. Meanwhile, a new organisation known as the Community Power Agency was launched on Wednesday to help the development of community energy projects.

The announcements come as news circulates that the NSW government’s Office of Environment and Heritage has approved funding for up to 9 groups to either conduct feasibility studies into their business  models, or provide funds for the groundwork for particular projects.

Community ownership of renewable projects has yet to take off in Australia, even if in countries like Germany it accounts for around half of renewables investments.

Australia has two community-owned wind farms – the Hepburn Wind project near Daylesford in Victoria and in Denmark, near Albany in WA-  but community owned solar projects are tipped to be a compelling proposition because of plunging cost of solar and their ability to compete with retail prices rather than wholesale prices.

Farming the Sun Project director Adam Blakester, of Starfish Enterprises, said the  business model for the community projects his consortium is proposing is similar to that of the 400kW community solar project announced late last year for the Lend Lease development in Sydney’s Darling Harbour.

He said his group’s immediate goal was to secure half a dozen MOUs in the next couple of months with potential hosts of community solar projects. The funds allocated to his organisation by OEH, as well as contributions from the Earth Welfare Foundation, and Starfish itself,  will amount to half the “establishment costs” of the projects, which would include approvals, design, grid connection and prospectus. The other half of the costs would come from the hosts – which could be businesses, factories, schools, or council facilities.

Blakester said the model would work on a minimum 80kW array, with an upper limit of 400-500kW. It was important that all the electricity was consumed on-site, so the economics were for “behind the meter” consumption, displacing the retail electricity rate rather than the wholesale one.

“It is financially viable. You don’t offer get opportunity to drive compelling marketing or community education program that is commercially viable over 25 years in their own right,” he said. The minimum shareholding would equate to around 1kW – which would be in the range of $2,200 to $2,800.

“Community solar can be the next big thing,” he said. “It’s very compelling for anyone looking at green power rather than black power product. It could spread like wildfire”.

Community Power Agency co-founder Nicky Ison said there were around 40 community energy projects underway across the country. Her agency would provide support and advocacy, briefing state and federal politicians to ensure that legislative and other barriers were removed, and to encourage the establishment of a community energy fund.

Co-founder Jarra Hicks said the biggest challenges to community solar projects were finding the funding to do the feasibility studies to get projects to the point that they are ready for the community to invest in. Connecting in to the electricity grid and selling the power at a fair price is also a barrier faced by many projects.

Meanwhile, a Newcastle-based community group hopes to repeat the success of US-based Mosaic by using crowd-funding techniques to help finance community solar projects in the region.

CLEANaS, which stands for the Clean Energy Association of Newcastle and Surrounds, is a not for profit association which is launching the Lighthouse Community Renewable Energy project.

Daniel MacDonald from CLEANaS said the group would be targeting solar systems of around 70kW to 200kW, which can be owned by the community and hosted on the roof of a business or community facility. The owners would sign a power purchase agreement with the host, and would expect to make a return on investment.

MacDonald said the group was looking at a type of crowd-funding model that has been successfully deployed by Mosaic in the US. “We are looking to create a tool kit that will give a template that will be available to other groups in Newcastle and surrounding areas,” he said.

MacDonald said he was sure that the “time was right” given the trends in energy demand, the falling cost of solar PV, the corporate interest in sustainability and managing costs, and the interest from communities in investing in clean energy.

“The big carbon bubble will burst at some stage. And Newcastle is the best placed region to become a new energy hub for Australia. Being able to get ourselves in front of businesses that are using fossil fuels, and to transition that to community owned clean energy. It’s a great place to do it.”