Solar Power – A new opportunity for local councils

Solar Power – A new opportunity for local councils Article Image

Councils operate in a rapidly changing landscape amidst a world of huge financial pressures and are responsible for all major local services, such as roads, waste disposal, and other key aspects of infrastructure.

According to the Australian Local Government Association[1] (ALGA), councils own and manage $354 billion in assets, and look after annual operating expenditure of around $33 billion.  This represents just under six per cent of Australia’s total public sector spending.

For most councils, this requires ongoing investment to ensure services are not only maintained but evolve in line with the latest developments in technology and meet the needs of their community. In addition to this, making services and technology eco-friendly has become an important issue.  Incorporating all of these aspects is a big challenge given local councils receive just 3.5 per cent of Australia’s total tax revenue a year[2].

Bridging the digital divide with solar power

Maia Financial recently helped one council to meet the growing digital demands of its ratepayers, after heavy lobbying by the vibrant local business community that calls this inner-city suburb home. Many business owners and members of the community wanted to access Wi-Fi when visiting local cafes and eateries, but until recently, didn’t have access.

Over recent years, global warming has become a widely talked about topic, with many private and public sector organisations and entities looking to implement solar power to run their equipment and offices. With solar power becoming a more accessible and cost-effective option, having an environmentally friendly public service was easily attainable, making this a win/win for the council and the community.

Finding finance

The council knew a Wi-Fi network was an important service which needed to be implemented as a priority. The question was how to fund this asset.

The council’s finance team considered a number of different options, including capital investment, using a traditional loan or a lease facility.

By working with the Maia Financial asset team the council considered each option and chose the lease facility.

This solution fully funded the project using a rental facility. For the council, the result was a much better use of its operational expenditure than had it chosen to finance the asset itself or use a bank loan.

The lease offers the council significant flexibility in the way the Wi-Fi network is managed in accordance with how the community’s digital needs grow.

On top of this, the lease also covers installation of the network, hardware, software and ongoing consultation to ensure its reliability and availability to the community. This included specialist solar power batteries batteries that could store excess energy which could be used to power the Wi-Fi at night and on overcast days.

Regular upgrades and additions are also covered under the lease, recognising the fast pace of technological change. So even if the technology changes, the solution the council has chosen is able to adapt to it.

It’s a great outcome for the community, which benefits from a dependable local Wi-Fi network. But it’s also a fantastic outcome for the council, which has avoided a large capital outlay or increase in its debt levels, at the same time exceeding community expectations about the services it expects the council to provide.