What does it mean to invest in Solar for an organisation?

Communities can help organisations to progress energy projects by finding the upfront capital and arranging to be repaid over time. Solar projects are usually profitable and can provide extra income for both the investors and the organisation. (The best project might include a battery).

The investment can be made so that many community investors can be involved. It can be made by a community organisation or a revolving fund. In each case the organisation borrows the money and then makes repayments to the investor/s over time as the project recoups its investment with savings on energy bills.

Benefits of investing in Solar for an organisation

• Increase renewable energy by helping a project proceed that wouldn't have otherwise.

• Community prosperity. The solar savings will provide local benefits for the organisation and for the community. How the savings are shared will depend on your financial model.

• Creating self-sufficiency and resilience. Your community will be less reliant on external sources of energy. If paired with a battery, the solar system can be used to keep the organisation operating even during grid failures.

Some challenges of investing in Solar for an organisation

• You need to find an organisation that is willing to put solar on its building but unable to proceed with this project on its own. Sometimes this involves convincing an organisation that solar is worthwhile. Sometimes it involves convincing the organisation that it should borrow money from the community.

• You need to agree a loan arrangement between the organisation and the community. This may involve a community organisation that offers the loan. It may involve setting up a cooperative or a special purpose investment vehicle to lend from multiple community investors.

• You may need to recruit and motivate investors.

• You need to feel confident about the energy savings that will result from the investment.

• Some community organisations don't use much energy when the sun is shining (eg sporting clubs) so the payback from a solar investment can be poor in these cases.

When is investing in Solar for an organisation a good choice?

• If a solar project is profitable, it is worth progressing. Rooftop solar projects are one of the best ways to generate local value in your community.

• Solar projects on businesses and large community buildings provide an excellent way to showcase solar in your community and to engage many people in the community with the project - eg users of the building, customers of a business and members of a club.

• Bigger is better for community investment in solar projects because there is often substantial volunteer effort consumed in developing the project and convincing all the investors and stakeholders.

• For smaller organisations, investing in solar might best be done with simple loan arrangements - for example, see our project on setting up a revolving fund.

Project examples for investing in Solar for an organisation

Pingala - Young Henrys: Pingala, in Sydney, uses a cooperative model to match investors and projects.

Other guides and resources

Small-scale community solar guide: This guide provides 10 different examples of community solar alongside the legal and business models of each. It will help you understand the key issues to be agreed at the outset of a project.

Community-owned renewable energy - A how to guide: This guide takes you through the steps of developing a community energy project.