A Roller Coaster Journey of Energy
Solar energy, now the cheapest source of electricity in history, has drawn our attention for its critical role in the energy transition. Solar deployment in the UK is expected to further increase five-fold in the next decade. Contrary to the common misconception that solar doesn't work in the UK, Solar is uniquely suited for densely populated urban areas since wind turbines require a lot more space to operate.
Despite these promises, the UK is still experiencing one of its worst energy and cost of living crises. So why does the energy crisis persist when solar energy exists as a cheaper and cleaner alternative? We discovered that the energy crisis persists because solar remains inaccessible to many due to affordability and feasibility issues. These individuals are mostly stuck in the middle - neither wealthy enough to afford renewable alternatives such as personal solar panels nor eligible for government benefits to reduce energy costs. Solar remains a luxury for homeowners with suitable roofs and sufficient disposable income.
As we delved deeper, we were struck by the potential of a new mechanism, community solar, to democratise solar access. Here’s how it works: Community solar organisations launch share offers to residents, pooling funds for solar installations, mainly on community buildings like schools, libraries, and churches. They generate revenue by selling cheap solar electricity to these buildings and any surplus back to the grid. Profits provide a modest 3-5% annual return to shareholders and creates a shared fund to assist local residents facing severe fuel poverty. Community solar enables everyone to benefit from solar, regardless of their ability to install rooftop panels.
Unfortunately, due to regulatory constraints, community solar in the UK hasn't reached its full potential. This is because under the current regulation, energy supplier licences are very costly to obtain, so community energy organisations are not allowed to sell electricity to households. Consequently, community solar organisations are forced to sell their affordable, clean electricity to utility companies, who then markup the price and sell it back to consumers.
Just when we thought regulatory changes were the only answer, we took a step back to envision the future of energy. This inspired us to rethink the entire challenge - what if energy can be sold as a tailored service rather than a commodity? The current model of selling energy by the kilowatt hour is anyways not aligned with customers' desires for reliable services at reasonable prices. Selling community solar as a service also allows us to “short circuit” the regulation constraints because we’re a service provider rather than an energy provider.