Community Financing of Community Batteries is an alternative to a market approach of financing and operating an electricity storage market. Community Financing with local distributor operation is significantly cheaper for the following reasons.
- The Capital remains in the community.
- The Profits from Capital remain in the community.
- The Community recycles the Capital within the Community.
- The Profits are taken in reduced costs rather than more money.
- Communities are long term investors as they stay longer than individual members.
- Community Batteries ensure most local production of electricity from roof-top solar is consumed locally.
- Community Batteries are housed in member residences or Community Buildings.
- The existing electricity market operations remain unchanged.
The above graph can be found in this spreadsheet.
Some of the assumptions in the spreadsheet are:
The operating costs and financial administration are the same. Only the difference in Capital profits and losses are calculated. In practise both operating costs and financial administration drop significantly with Community Financing.
The interest rate on Bank Finance is the same as set by the Australian Energy Regulator for transmission and distribution. The return on investment rate for Community financing gives double the return of the average Australian Superannuation Fund. Investors receive their returns as discounts on their electricity invoices.
It is assumed the electricity distributor operates the local batteries and provides the local cooperatives with the savings to distribute to a Community. It is assumed the current retail arrangements remain in place.
Implications of Community Financing
- Everyone in a community benefits equally because consumers acquire the Capital in the Battery when they pay a percentage of their savings.
- Individuals can move between communities without financial penalties associated with Batteries.
- Community Batteries are economic today and provide an opportunity for regional production of batteries to provide local employment and industries.
- Community Batteries supplement the Reserve Capacity needed for reliable electricity supply.
- Community Batteries are an alternative to the batteries needed for reliable and continuous broadband.
- Community financing can extend to financing solar panels, home insulation investments, and electric vehicles to increase the rate of Rewiring Australia.
