Unleashing the force of citizen investors
Americans continue to underestimate the importance of community ownership in the renewables sector. A recent article at Think Progress is the latest example. But one significant number was left out of the calculation, as we discuss in the latest edition of Do the Math!
Last week, I referred to an excellent article by John Farrell of the Institute for Local-Reliance in discussing why Americans fail to understand how third-party ownership will prevent energy democracy by leaving ownership of energy supply in the hands of corporations. Specifically, Farrell spoke out convincingly against "master limited partnerships."
This week, the energy director at the Center for American Progress, Richard Caperton, responded. His main bone of contention is that "it's not clear that small investors have enough money to make the transition to a zero-carbon future happen on their own." His back-of-the-envelope calculation shows that the investments needed for the US to go 80 percent renewable are equivalent to 20 percent of the average household's net worth in the US.
Interestingly, Caperton does not mention the date for that calculation: 2050. Had he done so, we would have easily been able to calculate that the 17,000 dollars he says every household would need to invest do not all come at once; indeed, we have 37 years until 2050, so the average household does not even need to invest 500 dollars a year.
And once again, familiarity with the German situation is helpful. In the 1990s, the village of Schönau (population: 2,400) had to come up with nearly 2.9 million euros in their effort to take over their local grid – more than 1,200 euros per person, not per household, and it was needed immediately. The community itself got 2 million euros from its own citizens, with an additional 900,000 coming from citizen investors from the rest of the country. In total, the amount was spread across 650 investors, who contributed nearly 4,500 euros on average.
"But Craig," I can hear you saying, "that's cherry-picking – you can't switch over the entire country that way." Don't tell that to the Germans, for whom the entire Schönau campaign has become a role model to follow. Berliners are now fighting to get back their grid, and Germans in general remain skeptical of corporate ownership of renewables. Indeed, German experts increasingly wonder whether there is much of a role for large corporations in the country's future renewable power supply at all. (Craig Morris)