Funding Solar for Low Income Households in Canberra Australia

Economic Democracy

Implementing Economic Democracy with Pre Power Cooperatives

  • Cooperative members who purchase electricity from the cooperative have control of the cooperative’s investments.
  • Investors have a right to get their money back plus an agreed return on investments and have a claim on the installations for any unreceived amount if the cooperative goes out of business.
  • Consumer members pay for electricity. Their payments fund the operation of the cooperative and the repayments to investors.
  • When the investors are repaid this reduces the claim they have on the assets of the co-operative. The reduction is transferred to the members who paid for the electricity.
  • This means the consumer-member claims on the assets will, over time, equal the value of the assets from which they receive electricity. When this occurs, the members do not pay for electricity but pay a maintenance and co-op operating charge.
  • Members who have claims on cooperative solar installations can sell their claims to other members or investors in the cooperative, but not to anybody outside the co-operative. This rule prevents the extraction of asset value from the cooperative.

Typical Set of Rules for a Pre Power Cooperative

  • Consumer members pay 70% of a benchmark grid price.
  • Investors get double their money back over twenty years in equal monthly payments.
  • Consumer members buy electricity from the solar panels installed on their roof. This income is used by the co-operative to repay the investors as well as to pay for operating costs and maintenance. When investor funds are repaid, the consumer member’s claim over their solar panels is increased by the claims given up by the investors.
  • If consumer-members fall behind in their payments to the cooperative they are asked to work with the cooperative to settle their account. As a last resort, the cooperative may remove panels from their roofs.
  • Members can require members to leave the cooperative with a 50% vote of other members.
  • Members assist in operating the cooperative. How much and what they do is determined through negotiation. If members refuse to contribute, they are asked to leave the cooperative.
  • New members must be nominated by existing members.
  • A group of members can break from the cooperative and start or join another cooperative and take their asset claims to the new cooperative.
  • Investments are in the form of pre-purchased electricity from solar installations. The value of solar installations in the cooperative determines the value of the investments.
  • Consumer members agree to pay their invoices with direct debit as a condition of membership.

Benefits of Pre Power Cooperatives

  • Individual consumer-members are custodians of solar installations. They do not own or possess the installations. They have the responsibility for them and get benefits from them in return.
  • Members have claims to the value of the assets in the case of the cooperative closing down or them leaving the cooperative.
  • Consumer members are part of a community of solar users and contribute in various ways to the cooperative. Having the opportunity to contribute reduces conflict and increases cooperation.
  • If relationships with members break down, members can join other cooperatives without penalty.
  • Consumer members gain by remaining a member of a cooperative. It means they are likely to agree to compromises when disputes arise.
  • Cooperatives are not charities and all members get a fair share of the output from the solar installations. It removes the “charity mindset” that afflicts some other programs.
  • The financials and operations of the cooperative are transparent. Everyone knows the rules and financial status. It reduces the opportunities for conflict and reduces the cost of operating the cooperative business.
  • The cooperatives are private but transparent. Each member can see the overall financial state of cooperative and see their position. Members contribute by checking and assisting other members to ensure the integrity of the system.
  • The cost of operating cooperatives is low as there is no need to compete for members, and there is no strong advantage in having large cooperatives as all cooperatives use the same or a similar platform.
  • Cooperative administration and operations scale because cooperatives are formed to provide services to individual cooperatives.
  • Cooperatives will tend to be local as this leads to lower costs. Local cooperatives lead to social inclusion making neighbourhoods desirable, and so increasing the value of membership.
  • Cooperatives can negotiate directly with landlords or other third parties on behalf of members. It leads to better outcomes for landlords, third parties and members.
  • Philanthropic organisations and Governments can reduce the cost of energy to some members by agreeing to waive their return on investments. Typically this will reduce the cost of electricity to one-third of the grid price for some members as decided by the external organisation. For example, a household might lose a substantial amount of income and be unable to pay their invoices. A government can act independently of the cooperative and move its investor benefits to a particular member. If a member obtains outside assistance, it is kept private.
  • Members are encouraged to use their cooperative system as a place to keep their savings. They will get a high return on investment, and their funds are liquid.
  • Cooperatives are businesses. Member involvement gives training in operating and running other cooperatives or other businesses.

The Business Case for Super Fund Investment in Pre Power Cooperatives

Pre Power Cooperatives Social Benefits

Investment Returns

Government Assistance to low-income households

Potential Pre Power Cooperative Membership

Barriers to Adoption



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

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Kevin Cox

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