Community Energy Cost Analysis

Nicola Mares • 16 March 2020

This research investigates the cost and income structures and cost reduction potential of six models of community renewable energy: Repower Shoalhaven, ClearSky Solar Investments (CSSI), Sydney Renewable Power Company (SRPC), Hepburn Wind, New England Wind, and Moreland Energy Foundation’s (MEFL) rates-backed low income Solar Savers scheme in Darebin.

This research was undertaken to test the hypothesis that the provision of financial assistance to an emerging sector will establish a path towards community energy projects that are independent of government or philanthropic support.

To test this hypothesis the research focused on questions such as:

  • What is the cost reduction potential of these models?
  • What strategic sector building initiatives can best contribute to the cost reduction or cost effectiveness of community energy projects?
  • How sensitive are community energy projects to external factors such as the Renewable Energy Target and electricity prices?

Data from the six models included costs and income for the first project of a model, the likely or actual costs when a model is replicated through a second project, and an estimate of what the minimum possible cost of the model could be if costs could be brought down based on a number of favourable preconditions. The cost reductions are estimates from the model developers, and in some cases represent firm representations of plans to streamline processes or reduce overheads, and in other cases is a looser estimate of what is achievable. In all cases the “minimum possible cost” should be treated as more speculative than the “replication” cost.

The models were found to have very different cost and income profiles, however the one common element was that the first project application of these models is heavily reliant on in-kind contributions, particularly volunteer time. In-kind contributions constitute up to a third of total project development and operational costs for some models. This is a feature of community energy projects and demonstrates the difficulty of establishing a model for the first time.

The most important factor in reducing the costs of a model was found to be successful replication.

A single replication alone can reduce project development and operational costs by between 4% and 67% (combined monetary and in-kind contributions). The average cost reduction from the first model replication for wind projects is 15% and for solar projects is 29%.

Please click on the link below to download the report.
Community Energy Cost Analysis & Cost Reduction Potential Report