Economic potential to include lower-income households in energy communities under application of a two-stage saving reallocation process

Abstract

This study proposes a two-stage saving reallocation process to provide additional financial support to lower-income households (in a financially volatile situation) participating in ECs. The first stage consists in the withdrawal of a certain amount of savings from regular EC participants; for that, two approaches are proposed, the first being based on fixed shares, the second being saving-based. The second stage consists in the redistribution of previously withdrawn savings to households in need; thereby, three different mechanisms are introduced: based on equal shares, load-based, and inverse. Based on a concrete Austrian case study, the economic impact of including different numbers of lower-income households combined with different permutations of withdrawal and redistribution mechanisms on different EC participants is investigated. Findings reveal significant economic potentials to support households in need: For a PV-based EC with 20 regular participants (mixture of households, enterprises and public buildings), adding six lower-income households has only insignificant (negative) economic impact on the regular members of the EC. At the same time, in addition to general savings obtained through EC participation, lower-income households experience a further increase in savings of at least 80% due to saving reallocation. Assuming that each currently existing EC in Austria would include on average six households facing financial difficulties, the financial situation of approx. 14% of households in need could be alleviated immediately.