Financing Community Batteries

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 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.

More on Community Financing

Capital Productivity

Capital Productivity and Community Batteries

Rewiring Australia with Public Capital

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Kevin Cox

Kevin works on giving individuals control over their online information - particularly their financial information with local communities.