Community renewable energy has significant political and economic benefits, but is often hindered by five major barriers. Read on for a summary of the five barriers, watch them in a 17-minute presentation, or check out the vividly illustrated slideshow.
Barrier one is tradition. Utilities are simply used to operating a grid in a 20th century model, where large-scale power plants are connected in a top-down, one-way grid to power consumers. Policies that have allowed for on-site solar and wind generation, for consumers to be instead producers, have nibbled at the margins of this tradition. It’s only in the past year that utilities have realized how low-cost solar power can fundamentally up-end their entire business model. And the response has often been to entrench.
A second barrier facing community-based renewable energy is capital – upfront cash to buy a solar array or wind turbine. And the biggest cause is securities law and regulations, intended to prevent fraud like perpetrated by Bernie Madoff and others, that makes pooling capital very difficult for groups of interested local power investors. The federal or state rules often come with high compliance costs or significant limitations that hinder most efforts to raise community capital.
A third barrier is cash flow. American renewable energy policy is a byzantine array of tax incentives, rebates, and bill credits that can challenge a CPA. Figuring out how to pool all these revenue streams together to mak...