When it comes to action on climate change, there have undoubtedly been numerous wins. However, the dominant trend has been backwards, driven by a culture of narrowly defined self-interest.
The renewable energy story has followed the same trajectory as the climate change narrative. But a few years ago something happened. It became cheaper and easier to generate your own power with clean energy than to buy it from the grid. Sharp reductions in solar power prices opened the door to a new renewable energy chapter, by aligning economic self-interest – the dominant cultural force of our time – with clean energy.
Currently, we still need a grid for back-up, and that grid is predominantly fossil-fuelled, but the door is now ajar, and there is light on the other side. Our challenge now is not just to walk through that door, but to storm through, to knock the door down and take the hinges along with us.
Readers familiar with my previous work will know I am convinced the economic drivers for solar-plus-storage will become compelling, making power prices cheaper for the regions, and making the transition to clean, affordable energy also more achievable for cities, by removing the cross-subsidies from city to regional customers. The chief executives of Ergon Energy, Horizon Power and ETSA Utilities have all recently acknowledged how plunging costs of solar and batteries open up potential for a new model of power supply. The compelling logic of solar-plus-storage will help us knock the door down.
However, if we want to bring the house down and take the hinges with us, we need a new story for renewable energy that goes beyond the narrow sense of economic self-interest that’s been allowed to become the dominant culture of our time.
Last week, Energy for the People unveiled the first step in our contribution to that new story, a crowd-funding platform for solar power called The People’s Solar, which aligns personal and social incentives by blurring the lines between them.
Our first projects’ use crowd-funded, tax deductible donations to pay for solar panels on community buildings – childcare centres, schools and other community facilities. Financial saving are re-invested to support social and environmental projects, turning a $100 donation into as much as $400 of community value over time. Soon, we will make an investment product available that shapes these new cultural norms in a similar way, but also taps the larger pool of money that comes with being able to provide a steady financial return of 6 per cent per annum to investors.
Time will tell what market appeal these products have, but with a nascent divestment movement in Australia, the link is obvious. If you have money in a bank that supports environmentally destructive fossil fuels, earning less than 4 per cent before tax, why wouldn’t you switch that to a solar investment account that earns 6 per cent before tax?
To take the link further, we are told approximately $100 million has been divested out of fossil fuels in Australia, to date – and that’s just what is directly trackable. Our research suggests, depending on where in Australia you are, that would be sufficient to take 5000 homes off the grid, using solar power, battery storage, back-up generation, the existing network and a smart energy management system. As an investor in this new infrastructure, our modelling suggests that in Victoria, where the business case for stand-alone power is weakest, you could earn an 8 per cent return on your money.
As we refine and improve our systems, and most importantly the story, we will be making The People’s Solar available to communities across the country.
Our initial partnership is with the Mount Alexander Sustainability Group in Central Victoria, a group with a rich history of leadership on climate change and cultural engagement. We hope partnerships like this, which helped us launch the concept, will help it grow and create a new cultural story, contributing to the foundations of a civil society, capable of meeting the big challenges of our time. One thing is for sure, a society built on the narrow definition of self-interest we have today is not.
Tosh Szatow is co-founder and director at Energy for the People, a business which delivers clean energy and energy efficiency projects for a rapid transition to a citizen-powered clean energy market.