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Community Power: Where Economic and Environmental Benefits Go Hand-in-Hand

Community Power:

Where Economic and Environmental Benefits Go Hand-in-Hand

A joint article by 
Samantha Go and Devika Narayan, SolSolution 
Mümtaz Derya Tarhan, The Community Power Report

Perhaps one of the toughest challenges of our day is to strike a balance between short-term economic bottom-line and long-term environmental and economic sustainability. Community Power projects offer a very comprehensive and convincing solution to this problem by combining economic and environmental benefits – both in the short and the longer term. Local ownership of renewable energy initiatives promise to generate economic benefits both at the micro and macro levels, help citizens taking control of their own power generation and consumption, and build a strong foundation for a safer and more reliable energy future.

Local Ownership Pays Off – For Everyone!

Local ownership accounts for 50%
of all economic activity created by a project 

Whether the locally generated electricity is sold to the grid or used to offset electricity costs through net metering or behind-the-meter usage, project owners receive a direct financial benefit from community power projects. A recent study from Germany revealed that half of all economic activity generated through a project returns directly to the pocket of project owners, or in other words, community members.

Community-based energy projects not only benefit their owners economically, but they lift up the entire local economy through additional employment and business opportunities as well as the creation of surplus dollars.

Local Energy Leads to More Sustainable Local Jobs

A National Renewable Energy Laboratory study found that the impact of community-owned projects on jobs creation during construction period is 1.1 to 1.3 times higher than corporate ones, and 1.1 to 2.8 times higher during operations period.

The employment and investment impact of community-owned projects can also go beyond a local community. Community ownership played a pivotal role in Germany and Denmark becoming global leaders not only in renewable energy generation but also in energy research & development and systems manufacturing. Currently, more than 50% of Germany’s renewable power is generated by community-based projects, and 80% of Denmark’s world-renowned windmills are cooperatively owned.

Going back to the local level, it has been shown that the surplus dollars generated by community-owned projects through ownership, employment and other business activities have a high chance of being spent within the community. A study by Iowa Policy Project shows that financial resources that remain in the community are more than five-fold for small wind projects owned by local community members compared to large wind projects owned by out-of-state companies.

Community Power uplifts the entire local economy

Community Power Leads Us Towards ‘Negawatts’

While some may think the environmental benefits of community power projects go without saying, they actually go much deeper than one may initially think! Yes, generating our electricity from clean sources is important, but in order to combat climate change in a comprehensive and sustainable manner, conservation is indispensable. It is even widely recognized that conservation before any energy generation takes place is much more cost and time effective than combating the negative effects of climate change after the fact.

As underlined by Patrick Devine-Wright, the current scheme of centralized global electricity production from traditional sources creates a significant ‘spatial and psychological distance’ between energy generation and energy use. In simpler words, we just flick on and off without knowing where and how out electricity is generated, and without even a basic understanding of the economic, social, environmental and personal impacts of electricity generation and use.

Community Power helps us understand
the impacts of our electricity
generation and consumption choices

Local ownership provides community members a direct stake in clean energy generation, and thereby reduces that ‘spatial and psychological distance’ and encourages a culture and behaviour change regarding electricity use. Community members, who are now more aware of how and where their electricity is generated, are also much more likely to consume it wisely.

In shorter words, Community Power helps individuals become more connected to themselves, the environment, their community, and to the world.

Securing Our Energy Future

Besides generating clean energy, community-owned projects also provide a more comprehensive and sustainable solution to our energy issues.

Generating electricity close to where it is consumed reduces efficiency losses during transmission. This can speed up the transition towards distributed power generation from centralized sources, protect the environment, and generate economic benefits at the micro and macro levels. 

Remember the major blackout in 2003, anyone?

Distributed generation also increases a local grid’s reliability towards reducing its dependence on outside sources. It is safe to say that Community Power paves the way towards a safer and more reliable energy future. 

Along our journey through the ins and outs Community Power, please feel free to contribute to our conversation by leaving us a comment below. Or you can tweet us with your thoughts and questions @thecpreport with hashtag #PowerUp.

Follow SolSolution on Twitter @thesolsolution and The Community Power Report @thecpreport

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