Explainer: Labor plans 85 “solar banks” to open up solar to renters. What are they?

Labor’s newly unveiled climate plan includes a proposal for dozens of “solar banks” – community-owned solar projects designed to break down the barriers to solar ownership faced by one-third of Australian households, such as renters and apartment dwellers.

The Powering Australian Plan, includes a commitment to co-invest $100 million to support the creation of 85 solar banks, which Labor says could allow more than 25,000 households to share in the benefits of solar power through a cooperative ownership model.

What exactly are these solar banks?

The solar bank policy would allow households to buy a share of a medium-scale solar farm, likely to be in the 1 to 5 megawatt scale and built in a location where there is sufficient space.

Members of the community would be able to purchase a share of the solar project, allowing households to buy a certain capacity of solar generation, without needing to install it on their own home.

Many are likely to be built in regional areas, and the ownership share would entitle its owner to receive a credit for their share of the electricity produced by the solar project.

In this way, households would be able to receive the benefits of reduced electricity costs that can be achieved through the installation of rooftop solar without having the solar panels installed on their own property.

“All Australians, whether you live in an apartment or on a farm, should be able to reap the benefits of cheaper, renewable energy,” Labor’s climate plan says.

“Community solar banks, allowing those locked out of the market to access solar energy, have been popping up around the world and meeting this challenge for over a decade, including in over 40 US states.”

The “solar bank” concept has been developed through the Institute of Sustainable Futures at the University of Technology Sydney and the Community Power Agency.

Originally dubbed “solar gardens”, the concept has been adapted from the idea of community gardens that allow those without a backyard to plant and grow fruit and vegetables in a shared plot of land.

The solar bank proposal works much the same way, allowing those who cannot install rooftop solar, such as renters or apartment dwellers, to buy a share of a community-owned solar project.

The Community Power Agency produced the following video to explain how the ‘solar garden’ concept works.

“When we consider the volume of domestic rooftop solar that has occurred in the past decade and still that 30 per cent of Australians are still locked out of owning solar due to renting, living in an apartment or shaded roof, the potential for “Solar Gardens” is significant,” Community Power Agency project manager Kim Mallee told RenewEconomy.

“Community energy projects such as “Solar Gardens” play a critical role in the transition to renewable energy not just in terms of megawatt capacity but also in a way that is socially inclusive, creates social licence and stimulates meaningful regional economic development.”

“In exchange for their owned/leased solar shares, participants receive discounts on their electricity bills via a retailer. Solar banks may be owned by community cooperatives, which would enter into energy agreements with developers and retailers on behalf of participants,” Mallee added.

Labor’s funding would be used towards the completion of feasibility studies and cover the development costs of the projects, as well as providing up to 50 per cent of the capital cost of a project. Its modelling suggests that it could cut Australia’s annual emissions by 100,000 tonnes a year by 2030.

It is not the most substantial piece of Labor’s climate platform, but the party will argue that it has been designed to help more households share in the benefits of renewable energy and will sit alongside a previously announced plan to support the installation of 400 community battery projects.

Labor said that it hopes this initial round of funding would work to demonstrate the viability of the ‘solar bank’ concept, allowing private investment to drive the creation of more community-owned projects.

The policy provides Labor with the ability to make electorally strategic announcements around where potential solar banks may be located, presenting an opportunity to bring solar into communities and opening up new options for those households who cannot install their own solar.

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Michael Mazengarb is a Sydney-based reporter with RenewEconomy, writing on climate change, clean energy, electric vehicles and politics. Before joining RenewEconomy, Michael worked in climate and energy policy for more than a decade.

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