SR20 instructor pilot reported a misunderstanding of the KOEL's; in the aircraft's limitation section. The aircraft departed with an inoperative alternator and lost electrical power; requiring a turn back.

Narrative

During a routine currency training flight; I incorrectly dispatched a Cirrus SR20 with Alternator 1 failed resulting in a loss of comms and [priority handling] return to the airport. After reviewing the POH's Kinds of Operating Equipment List (KOEL) and consulting with my superiors; we all misinterpreted the KOEL and assumed we could dispatch the airplane with an alternator 1 failed. The KOEL in fact; specifies the following:ALTERNATOR 1 1The '1' was under all operations (day/night/VFR/IFR). My interpretation (which turns out was everyone's as well) was that I only need ONE alternator if alternator #1 fails. Note that SR20s have 2 alternators. That is in alignment with other KOELs that I have experience with. I work as an experimental crew member (flight test); and our AFMs are interpreted that way. However; the Cirrus POH actually meant to say 'you need ONE alternator ONE'. If I could not have dispatched; I would have expected it to say '2' for 'I need both alternators online'. That was a big misinterpretation that we all realized after we began to read the entirety of the KOEL and find parallelisms (i.e.; connecting the dots). Entire scenario:We climbed away from ZZZ and proceeded to the eastern seaboard. Approx. 8 NM from the airport; the Multi-function Flight Display (MFD) failed (turned black). I immediately went for my digital checklist (Cirrus made) on my phone while my student checked the Circuit Breaker (CB). At that moment we noticed the COMMs were degraded. I requested an immediate return to ZZZ calling for 'electrical issues; [request priority landing]'. The COMMs from that point on were intermittent. We immediately squawked 7600 and were able to hear 'Enter right base Runway XX' and 'Runway XX cleared to land' and 'look for light signals'. We also heard a 'IDENT if you are [requesting priority handling]' but our transponder had failed too by that point. I took control of the aircraft while my student grabbed a handheld radio. We had two on board (each our own). We re-established communications with the Tower and landed on Runway XX. We taxied to park on our own power with the fire department and ZZZ Operations in trail.I'd like to share 3 lessons learned:1. When you expect an electrical failure; trim the airplane for level flight. Cirrus has an electrical trim; and we were trimmed for a faster cruise when it failed. That made the landing more challenging than it had to be. 2. The BOSE headset with bluetooth did not work. While my student was reaching for the handheld radios; I tried calling both the TRACON and the Tower on my phone. The call was established and I heard both Controllers pick up. However; my microphone was not transmitting. I suspect there is an interaction between the intercom system (ICS) that blocked the microphone in that electrical condition. It probably would have worked if I had disconnected from the ICS. But while flying the airplane; that task is rather complicated. It's difficult to recreate the exact condition on the ground to test what combination of settings would work; but the important element here is the awareness of what may or may not work.3. KOEL interpretation. This one is rather tough to mitigate other than teach more explicitly (and practice of course) the possible failures. In Cirrus training we focus on in-flight emergencies; but not KOEL actions very much. For someone like me who has experience in part 25 documentation; I was lead to believe something different. Furthermore; the fact that so many other people misinterpreted it (including an experimental test pilot I work with); leads me to believe that the root cause is indeed human-factors related. It is NOT an excuse; but a realization that I need to be extra-critical with my interpretations than I previously thought. KOELs are not designed to be complicated; but my background and previous experiences did not help me in this situation.