Solar Commons Business Model

As a part of our Solar Commons project, we worked with economists, lawyers, and business experts to create a business model that can be used to replicate a Solar Commons project. The Business Plan Report can be accessed on the Solar Commons website here (after this date).  You can use it to create a solar commons project in a right of way in your neighborhood.

Our demonstration project was funded by donations and sponsors, but the business model explores other funding methods like private investment, which can benefit from tax incentives for renewable energy projects. The business model also explores other ownership models where the investors have ownership for a period of time and then donate the project to the public trust.

The economic modeling we did in the business model showed that if donations of approximately $162,500 were used to pay for a 25kW PV system which could sell electricity at the very competitive contract price of around $0.06 a kW, it would bring in approximately  $2,000 a year to the trust.  Scaling up further would not increase revenue.  So a 25kW system seems like the right size for a solar commons installation.

 Could investors be found to invest in such renewable energy installations in a city for this amount?  With its multiple bottom lines, clearly the aim of the Solar  Commons is not to make money for either an investor or a trust owner.  Rather, the aim would be to produce clean, carbon-free energy in a small scale, distributed fashion giving a small amount of money to social equity or sustainable education efforts in communities where the solar commons stood.  The aim is to keep that small amount of monetary profit working for the community, while moving our nation forward in its efforts to switch to cleaner, safer, and more secure forms of energy production.  Investors with a tax appetit, a green interest, and a socially responsble portfolio may be well served by placing their money in community solar commons projects.   

If the price of electricity goes up over the next 25 years with the price of ever more scarce fossil fuel, a donation-funded Solar Commons seems even more reasonable. 

The economics of these and other ideas have been worked out in our business plan which has been given a creative commons license and made available on this website.