Business models for community microgrids

Abstract

With lower cost of renewable technology, particularly solar photovoltaic, more and more customers consider having their own on-site decentralised power production as an addition or as an alternative to grid supply. This decentralisation trend requires development of new business models and new ownership structures to enable cost-efficient operation of energy systems. A variety of business models are available to finance these microgrids. A choice of a business model is very important, because it should suit the market environment to face financial risks, fit the regulatory framework, and serve the customers' primary needs in a most efficient and economical way. The latter becomes highly relevant in case of developing countries, where affordability is a major issue when implementing electrification projects. This paper reviews and classifies business models for community microgrids based on the system size, implemented technology, ownership structure, and revenue generation methods. From this analysis, the paper proposes a framework for choosing business models for community microgrids.