Solar for Seniors

Solar for Seniors

Austrália
Budget: 
< $1,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Provide the upfront capital to install solar power at low income senior's household in locations where governments offer generous gross feed-in-tariffs (FIT). Once installed the FIT will over time repay the initial capital back to the organisation. We plan on giving the household a percentage of the returns, while using the left over funds to install more systems at other low-income households.

About You
Section 1: About You
First Name

Brent

Last Name

Savage

Website
Country

, WA

Section 2: About Your Organization
Is your initiative connected to an established organization?

Organization Name
Organization Phone
Organization Address
Organization Country
How long has this organization been operating?

Less than a year

Your idea
Country your work focuses on

, ACT

Innovation
What makes your innovation unique?

Instead of relying on donations or a market, we are instead tapping into a guaranteed revenue stream. The Australian Capital Territory (ACT) government has introduced a gross feed-in-tariff (FIT) of 50.05cents per 1kWh, guaranteed for 20 years from when the solar system is installed. Being a gross FIT means that ALL the electricity generated receives this payment rather than a net FIT which only gets paid when the system exports electricity back to the grid. Based on figures supplied by the National Renewable Energy Laboratory operated by the DOE, a 1.5kW system in the ACT will produce 2173.6kWh annually, this will bring in $1,087.89 a year (0.5005 times 2173.6=$1,087.89). We plan on giving the selected household where the system is installed 25% of this payment; therefore they'll receive $271.97 annually or $5,439.40 over the life of the scheme, while the organisation receives $815.91 annually. The money the organisation receives can be used to pay back the loan that brought the system in the first place, or if the money is from a grant then new systems will be brought and installed. Although 75% might sound like an excessive cut of the FIT, the not for profit organisation needs to cover the costs of installing the system while also generating the funds to purchase more PV systems so other low income households receive the same opportunity.

Another unique thing about this innovation is that it reverses the benefits of the FIT scheme to the underprivileged. Usually FIT schemes increase the cost of electricity as everyone needs to pay for the scheme, will the system owner is rewarded financially. This creates a situation where the poor are paying a higher cost for electricity, effectively cross subsidising people that can afford such systems. By purchasing the PV system and dividing the FIT revenue with low income seniors we are causing a role reversal, now they are the ones that are benefiting from a scheme that would have normally excluded them.

Do you have a patent for this idea?

Impact
Tell us about the social impact of your innovation. Please include both numbers and stories as evidence of this impact

As we plan on giving the selected households 25% of the gross feed in tariff profit they will be getting $271.97 a year. Over the 20 year life of the scheme this amounts to $5,439.40 that they would not have otherwise got if it wasn’t for this scheme.

Also each year that these systems are installed 2.3 tonnes of carbon per a system will be stopped from entering the atmosphere. This figure is based on the National Greenhouse Accounts (NGA) figures, which are the official government figures used for accounting Australia’s Kyoto protocol responsibilities. Basically we assume that for every 1kWh of electricity produced by these systems we will directly offset 1kWh of electricity from the grid and that for the ACT 1kWh of electricity from the grid emits 1.07Kg of carbon.

Problem: Describe the primary problem(s) that your innovation is addressing

Currently there is a need to mitigate man-made greenhouse gases as it’s contributing to climate change. Climate Change poses a real threat to the way we live our lives. If left unabated climate change may cause higher sea levels and increase the risk of extreme weather events. Our proposed solution addresses the root cause of climate change at the source by changing the participating household’s electricity supply from carbon intensive fossil fuel sources to renewable energy sources, thereby minimising their contribution to the release of greenhouse gases from electricity generation.

There’s also a real social need to lower the cost of living for the elderly in Australia and we assume around the world. In Australia 1 in 4 pensioners live in poverty (OECD, 2009). This scheme gives low-income seniors an extra income which can only help to improve their financial position.

Actions: Describe the steps that you are taking to make your innovation a success. Include a description of the business model. What might prevent that success?

I have changed my studies to undertake an honours degree; my thesis is examining the viability of the proposed scheme. The thesis contains a fully referenced report about the scheme, it also contains an economic model that can be used to determine how this project could work under different funding methods and cost structures.

If we win this grant we plan on using the funds to legally establish the organisation. This will then make it easier to obtain more funding from government agencies and foundations that only give funds to established organisations that are tax exempt. Hopefully we get the funds to undertake a pilot project. The pilot project will be used to check the accuracy of the business plan. Once the pilot project is completed we’ll review the business plan and alter it according to the results and lessons learnt. If the pilot project is successful then we’ll pursue more finance either from governments, foundations, charities or even private finance to scale the project. If successful in Australia then we plan on rolling this out to other countries with favourable sun radiation for solar electricity and good renewable energy incentives to ensure that it is economically viable.

Basically the model is as followed. We obtain funding, purchase a new system and then collect the income generated from the gross FIT. Once we can afford to pay for a new system we’ll go out and do it all again. As more systems are installed our funding base will continually expand. This leads to a situation where the time between purchasing a new system is reduced, hence our growth will be exponential

From a SWAT analysis we have identified a number of weaknesses. Our major problems include: lack of funding (not having the funds to scale), lack of technical legal and finance expertise. To overcome these we plan on obtaining advice from uni colleagues or the Research Institute for Sustainable Energy (RISE) which is linked to the Uni where I study. They are experts in renewable power systems and testing and so are the logical choice to seek advice about which systems are best for this application. Finance and business advice will come from either another NGO, pro bono, or if enough funds are obtained and no other options are forthcoming then we’ll hire professional help. As with most projects there are fixed costs that occur no matter how big or small a project is. If the scheme doesn’t reach a certain size then business costs will eat away at the profits and the scheme could ultimately fail. Therefore, we have to obtain sufficient funds to purchase enough systems so that our income offsets our costs.

Results: Describe the expected results of these actions over the next three years. Please address each year separately, if possible

By conducting a 1 year pilot project (needs to be a year so we know how the scheme will fair during the best and worst weather conditions for solar) we’ll be able to tell how accurate our forecasts of costs and revenue were. From here we can alter the plan and take a credible business plan and pilot project case study to various foundations and other finance bodies. Depending on the funding arrangements we’ll either have to pay back the funds over roughly a 15 year period, or if we obtain grants the income generated from the systems can be used to allow us to purchase more systems as we can afford them. In year two we’ll monitor reaction to the scheme and start investigating the feasibility of developing this scheme in different countries. In year 3 after a whole range of countries have been studied (more business cases) we’ll use some of the income generated to set the scheme up in the most promising locations. We'll also try to obtain local funding, all the while we'll continue to keep expanding our Australian operations.

How many people will your project serve annually?

101‐1000

What is the average monthly household income in your target community, in US Dollars?

$100 ‐ 1000

Does your innovation seek to have an impact on public policy?

No

If your innovation seeks to impact public policy, how?

Approximately 150 words left (1200 characters).

Sustainability
What stage is your Social Enterprise in?

Idea phase

Does your organization have a board of directors or an advisory board?

No

Does your organization have a non monetary partnerships with NGOs?

No

Does your organization have a non monetary partnerships with businesses?

No

Does your organization have a non monetary partnerships with government?

No

Please tell us more about how partnerships could be critical to the success of your Social Enterprise

Partnerships are critical for success, having a partnership with an organisation that is willing to run the scheme under their banner will enable us to reduce our operating costs, as we wouldn’t have to register a new organisation and pay all the cost that are associated with it. If we can get Murdoch University (my current university) or RISE on board then they will be able provide valuable advice on system components and configuration. We'll also try and partner with solar manufactures or retailers if they are willing to give us good deals on PV systems. In addiction we also seek partnerships with reputable local NGOs to add legitimacy to the scheme.

Overall partnerships are vital as they can open up new funding opportunities and can provide invaluable advice and assistance. Having the right organizations on board will provide peace of mind to the public, potential donors and participants which can only be of benefit to the scheme.

We would like to learn more about how your initiative is financially supported. Please explain your business plan/revenue model

Our main source of revenue will come from the gross FIT (paid by the electricity utility, mandated by the ACT government) and from federal government rebates that are offered to the purchasers of PV systems. However, the federal government rebates are not calculated in our pricings as most installers sell PV systems with these costs already deducted. The gross FIT (earned income) is calculated to be $815.91 annually, per system for the organisation. These workings are based on the National Renewable Energy Laboratory's information that a 1.5kW system in Canberra/ACT will produce 2173.6kWh/per year, that the gross FIT will pay us a minimum of 50.05cents per kWh, and that this is guaranteed by the government for 20 years from when a system is installed. This means that in Canberra a household with a 1.5kW system would get $1,087.88 per year ($0.5005 times 2173.6=$1,087.89). We plan on giving the selected households 25% of the gross feed in tariff profit. That means that each year for the next 20 years the organisation will receive $815.91 per installed system.

Other sources of funding might come from donations, either from business or the general public. We also hope to obtain grants or loans with generous conditions from foundations. Besides trying to obtain more funding we’ll also be trying to lower our costs per installed system. In this regard we’ll be asking PV installers and retailers if they could give us a better deal on PV systems (in return for positive publicity), or some kind of in-kind donation that will lower our costs.

Basically the model is as followed. We obtain funding, purchase a new system and then collect the income generated from the gross FIT. Once we can afford to pay for a new system we’ll go out and do it all again. As we are getting more systems installed our funding base will continually expand. This leads to a situation where the time between purchasing a new system is reduced, hence our growth will be exponential.

The Story
What was the defining moment that led you to this innovation?

When the topics of climate change, the need for government stimulus and the concerns of the pension rate had all reached Australian national media attention and political debate last year, I decided to develop this scheme as a solution to all three problems. I along with a lot of Australians feel sorry for pensioners that now struggle on low incomes. In 2009 a single pensioner received only $284.90 a week, while a couple received $475.90 a week combined. With the ever increasing costs of food, rent and bills these payments are no longer enough for them to live a healthy and happy life. I also feel passionate about the environmental issues and would like governments to take action to address climate change, however as this is not happening I believe that social enterprise might be able to fill the void in some instances.

The original idea was to supply seniors with renewable power at a reduced rate, which would be in place of a pension increase. This is because reduced energy costs are effectively the same as a pension increase, as electricity is an expense that cannot be forgone. Therefore the rollout of renewable power systems then would have created jobs and acted as a stimulus during the economic downturn and provided savings to the government via reduced pension payments in the long term. While that argument still stands the time has passed for government stimulus and a new feed-in-tariff program in Canberra has since been introduced. Therefore, the current idea as outlined above has really only emerged in its current form recently after I spotted the opportunity of using the gross feed-in-tariff for the benefit of the poor. Since then I have modelled the idea and altered the business plan. I currently believe that I’m at the stage where a pilot programme could be launched as it seems viable in the modelling carried out.

Tell us about the person—the social innovator—behind this idea.

My name is Brent Savage, I’m passionate about the environment and politics. I’m currently at university and was about to finish until the idea for this scheme arose. Since then I have researched the idea and am in the final stages of handing in my honours thesis. Soon I’ll have to find a job and I’m hoping that I can start the proposed scheme while also undertaking an MBA or some type of business management course.

In the past I have been employed in the live production industry doing sound, lighting and rigging for concerts. I’ve driven buses in the snow so I could learn to snowboard in my spare time and I’ve climbed mobile phone towers so you can enjoy greater coverage on your phone (telecommunications rigger). I’ve also worked for politicians which has allowed me to see what really happens inside government, I now know for sure that the media are either inept or are deliberately misleading. I’ve also been a member of the Australian Army reserves which I joined after being lucky enough to travel East Timor for some concert work, during this time I saw the positive impact of Australia’s peace keeping forces in the country and I instantly felt compelled to join.

Basically I’ve had a pretty full on life with a wide range of experiences, I’ve worked on concerts of all sizes, been a volunteer firefighter when I was younger and living in a rural area. I’ve experienced the life of a soldier and have had an insider’s view of the life for some politicians.

How did you first hear about Changemakers?

Through another organization or company

If through another source, please provide the information

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