The post Fifth CrowdFundRES Newsletter – January 2018 appeared first on CrowdFundRES.

The guidelines developed by CrowdFundRES are designed to facilitate better understanding of crowdfunding for renewable energy projects and to enable investors, project developers and crowdfunding platforms  to make well-informed decisions.

Click on the following links to download the guidelines:

Guidelines for Investors in Clean Energy Projects via Crowdfunding

Guidelines for RES project developers interested in financing their projects through crowdfunding

Guidelines for crowdfunding platforms interested in hosting RES projects

31 January 2018

The post Crowdfunding renewable energy projects: Guidelines for Investors, Project Developers and Crowdfunding Platforms appeared first on CrowdFundRES.

During the three years of project implementation, from February 2015 to January 2018, the CrowdFundRES project successfully achieved the following objectives:

• Deepening understanding of the adoption of crowdfunding for financing renewable energy projects through a qualitative and quantitative analysis and online surveys.
• Performing regulatory analysis and case studies to identify the challenges faced by the application of crowdfunding for renewable energy projects in Europe.
• Developing and applying targeted guidelines aiming at supporting more effective practices for crowdfunding platforms, project developers and investors.
• Formulating policy recommendations to help improve the market and regulatory framework for crowdfunding and renewables in Europe.
• Promoting the crowdfunding concept and its advantages among those who could contribute or raise funds.

The partnership has been led by WIP Renewable Energies (DE) and involved fourteen partners across six EU member states, representing stakeholders and market actors that are either directly or indirectly involved to crowdfunding.  The project partners include the European Crowdfunding Network (BE) and four of the most active crowdfunding platforms for RES projects in Europe, Abundance (GB), GreenCrowding/bettervest(DE), Lumo(FR) and OnePlanetCrowd(NL). Three project developers with projects of different technological and geographical focus around Europe that were positively disposed towards the use of crowdfunding for covering part of their needs for project financing, BNRG Renewables (IE), Valorem (FR) and REG (JE).  The consortium was completed by Solar Power Europe (BE), the University of Dundee (GB), Osborne Clarke (DE), Global2000 (AT) and youris.com (BE), leader in the dissemination and communication of the leading-edge European innovation via TV media and the web.

The project results have improved the understanding of how crowdfunding is used for financing renewable energy projects and have helped analyse the challenges faced by the application of this innovative mechanism for financing such projects as well as the drivers of its growth in Europe. Among the potential impacts in the future:

• CrowdFundRES will support the development of renewable energy projects that have entirely or partly covered part of their needs for financing through crowdfunding.
• As crowdfunding expands to other countries and also covers larger projects, the growth will be exponential, with the potential to have an important contribution to the growth of renewable energy, especially in the period from 2020 onwards.
• Crowdfunding has shown its potential as a is a very useful tool for reducing public opposition for RES projects as it involves citizens from the local community and not only. It is difficult to quantify the actual decrease in public opposition, but it has been noted that it results to a reduction in the time taken to authorise construction of renewable energy projects which signals lower requirements for resources and thus lower transaction costs, both for the project developers as well as for the permitting authorities.

Overall, CrowdFundRES will notably impact the further development of renewables and the way citizens and communities will engage in the energy transition in the next decade.

We would like to thank you for having followed and supported the project through our activities and we hope that the results and news listed in this newsletter will continue to be of interest to you.

Kind regards,

the CrowdFundRES project team

If you wish to get in touch with the team, please find contact details here.

The post Building on CrowdFundRES: CrowdFunding the energy transition appeared first on CrowdFundRES.

An introduction: representatives from OnePlanetCrowd, the University of Dundee and Abundance talk about the guidelines developed by the CrowdFundRES project to help investors, developers of renewable energy projects and crowdfunding platforms understand this sector of crowdfunding and make well-informed decisions.

Our Experience: A crowdfunding platform (LUMO) and two project developers (VALOREM and BNRG) talk about their experience with crowdfunding to fund renewable energy projects, highlighting difficulties and opportunities.

The Challenges: CrowdFundRES partners European Crowdfunding Network, Osborne Clarke and WIP Renewable Energies talk about the regulatory challenges faced by crowdfunding for renewable energy projects and introduce the policy recommendations developed by the project.

Learn more about the results of the CrowdFundRES project!

30 January 2018

The post Video interviews: Crowdfunding for Renewable Energy Projects appeared first on CrowdFundRES.

European countries have embraced a transition to renewable sources of energy at unprecedented scale. In the 1990s, few achieved a renewables share exceeding 5% of their gross energy consumption. Today, all 28 EU member states exceed that figure, in many instances by a considerable margin. However, achieving their ambitious renewables target of 20% across the Union by 2020 will continue to require persistent and joined up efforts directed at seeking out innovative approaches towards rebalancing the overall energy mix.

Crowdfunding can play an important role in the energy transition. When we set out to come together as a consortium of renewable energy project developers, crowdfunding platforms, industry organisations, legal specialists and experts in the sector in order to help unleash the potential of crowdfunding for renewable energy project development, we were aware of the considerable challenges faced by the sector overall. The recent financial crisis had impacted on early-stage pre-construction finance. This was acerbated by withdrawal of state subsidies in a number of countries, notably Spain, the UK, and Italy.

With sufficient awareness of its potential among all stakeholders, crowdfunding is well matched to help address resulting funding gaps, provided we attract and sustain high-quality crowdfunding platforms targeted at renewable energy investment, raise awareness among project developers of the suitability of crowdfunding as an additional source of finance, better understand the behaviour of individual retail investors and their interest in crowdfunding renewable energy projects, and ensure that the regulatory governance of the range of marketplaces that have emerged is fit for purpose to allow further scaling up across Europe, and without stifling market forces or ongoing innovation in the sector.

The CrowdFundRES Best Practices eBook “Crowdfunding Renewable Energy – A practical guide for Crowdfunding Platforms, Project Developers, Investors and Policy Makers” gathers important insights and recommendations in all these dimensions, drawing on a wealth of analysis of relevant data, industry and investor surveys, and stakeholder engagement across the sector. We complement this with a range of case studies that amply illustrate how far renewables crowdfunding has come in recent years. Individual platforms have raised funding for individual projects exceeding €10M, spread among 1,000 investors and more. Clearly, we are not yet in the reach of the lot sizes that are of interest to most institutional investors. But this is not the immediate aim of the quickly maturing renewables crowdfunding sector, which deserves acknowledgement in its own right for heralding a significant step-change in how democratised forms of finance can play a role in our overall transition to more sustainable forms of energy production.

Professor Matthias Klaes
Vinson Chair of Political Economy
University of Buckingham

Download the CrowdFundRES Best Practices eBook “Crowdfunding Renewable Energy”

29 January 2018

The post CrowdFundRES Best Practices eBook “Crowdfunding Renewable Energy” appeared first on CrowdFundRES.

In 2016, for a few hours, all of Germany ran only on renewable energy, demonstrating that one day, the release of carbon dioxide into the atmosphere could really be avoided. The remarkable thing here is that a substantial amount of this energy was not produced by the large utilities, but by citizens who installed solar panels on their roofs, or who operated small wind farms on their properties.

Some of these plants were financed through crowdfunding, which allows roof space or available land to be turned into a profitable business. However, as in any type of investment, it has opportunities and pitfalls.

youris.com met Sissy Windisch, from the German company Green Crowding, who published a guide for new small investors, to allow them to make the best decisions. The document was released under the EU project CrowdFundRES.

Why did you see a need for writing these guidelines?
Many people who are not professional investors put a lot of time and effort into researching, analysing and comparing information before they invest. So we thought it was important to help them make an informed decision, and the best approach would be to write a guide so that they ask the right questions, not just about projects and platforms, but also about themselves. For example, do I understand enough to make this investment? We see more and more projects and crowdfunding platforms out there. So it’s just to help people navigate, and understand what they’re doing and that a platform must be regulated. Anybody can check these regulations among other things.

This is a different kind of crowdfunding, unlike what platforms such as Kickstarter do?
I’m glad you asked that question because there’s a lot of misunderstanding. With Kickstarter you donate money, so a comic book for example can be published, or you just want an artist to keep on creating art. Instead, the type of crowdfunding we are interested in is debt-based, which means that you get your money back plus interest. If you finance a solar roof on a school for five years, you get 3% every year and at the end of five years you get your money back. So this is an investment.

However, there is an aspect of debt funding that makes it similar to Kickstarter: you invest in something you have a strong interest in.
Totally, and it’s the power of the collective good. Even the Statue of Liberty in the United States was crowdfunded. People got together, gathered the money and funded something. And now with the technology you can do it online; you can do it more efficiently. And it’s basically a democratic approach. You don’t need an intermediary like a bank to make the investment decisions for you. You look around and then say: “I like that project and that’s what I want my money to work for.”

Could you tell us more about debt-based crowdfunding?
Debt-based funding is already one of the largest types of crowdfunding. I would say one of the biggest areas in terms of funding volume at the moment is real estate. I think for 2016 alone the funding was estimated at around 3.5 billion dollars. But other popular areas are projects with predictable returns, whatever the type of project. So they would include peer-to-peer lending; for example if I want to repay my credit card debt I could ask other people to lend me money. We see this evolving in more and more areas: small businesses, college loans, science projects, infrastructure… And green energy, which is quite popular.

Is the role of traditional funders, such as government agencies and investment companies diminishing?
I think that it’s a cultural thing. For example, in Germany cooperatives have always been important in financing small-scale solar energy. And if you look at all the renewables capacity in the country, I think more than 50% is in the hands of private people and farmers. The big utilities fund only a fraction actually, often the most prominent wind farms. Now with crowdfunding you have more projects that are opening up to the public. We see real interest in a lot of energy efficiency projects, such as LED street lighting. People look for technology they like and then they invest.

If a farmer wants to crowdfund a project, does he approach an intermediary like the company you work for?
Yes, that’s right. Basically, we put the farmer’s project online, onto a platform. The investors will find it via this platform, and then their offers will be facilitated via the platform. The money flows via an escrow account and then onto the farmer.

Why can’t the traditional financial institutions, such as banks or investment firms, offer these services?
What we’ve often seen, particularly for renewables, is that banks and other traditional financial institutions often look for large projects to invest in. They prefer investing in one 50-million wind park than in 500 small photovoltaic installations.

How does the yield from crowdfunded projects compare to that of banks?
It depends on the underlying technology, regulation and other factors. Here research is required before investing. Any return is related to risk, so if you look for a 10 percent return for a short maturity usually there is risk involved. It is important to understand the risks and related returns before investing. Thus, we set out questions in the guide in this respect. The main difference with banks is that you know that you have access to other type of investment opportunities.

What are the risks for investors in debt crowdfunding projects?
If you have those early-stage technologies and innovations, start-ups, you may make a lot of money but also it’s very possible to lose your money. It may make more sense to do it by equity, or by donations. It’s difficult for project owners of early-stage technologies to predict: “Ok, in three years, every year I will return your money plus interest.” There are certain websites that also finance early-stage green technologies, like high airborne wind technologies.

For projects with predictable returns, like PV roofs, it is very different. Energy production or savings can give predictable returns. Hence, debt makes more sense. There are many other risks to be aware of, i.e. the solvency risk, currency risk. For example, the project owner may go bankrupt and is thus unable to repay you.

Europe is still a mosaic of different legislations and business approaches. Is this also the case for crowdfunding?
Differences are big, and in Europe government regulations are the main factor. The British approach to crowdfunding is the most advanced. They have bespoke regulation, and as a result the whole market grew at a faster rate. In France it took them a lot longer to actually implement the laws, so it was delayed. Now the country is really picking up again. It has a new incentive: if you are a green energy producer, you can sell your electricity at a higher price if citizens co-invest. Germany used to have high feed-in tariffs, which was particularly beneficial for small-scale photovoltaic projects.

By Alexander Hellemans

16 January 2018

The post Approaching energy crowdfunding with eyes wide open appeared first on CrowdFundRES.

Crowdfunding is considered by some experts to have the same effect on banks as Uber has on taxis. Green energy crowdfunding is no exception: the process is 100% digital and lets everybody become an investor or request funding for a sustainable project, without going through the banks.

This source of funding for renewables is in its infancy, the European largest platform Oneplanetcrowd was opened in 2012. “It is one of the fastest growing segments of crowdfunding. I would estimate around 100% growth per year in France,” said Alex Raguet, president of Lumo, a French energy crowdfunding platform.

Banks have been perceiving the disruptive character of digital technologies and startups. Annual survey of Efma and EdgeVerve Systems indicated that 47% of banks think that startups in financial area are highly threatening for their business.

But how disruptive is green crowdfunding in reality? Reinhold Mitterlehner, Austria’s federal minister of science, research and economy, said that crowdfunding is a “meaningful complement to traditional credit financing”, after the approval of a new law that regulates alternative forms of financing for start-ups.

First of all, not all kinds of renewable energy crowdfunding are competing with financial institutions. Donation-based crowdfunding is used for non-profit, social projects. An example is the projects of the platform RE-volv, partner of Leonardo DiCaprio Foundation. Only lending-based and equity-based crowdfunding is, to a certain extent, stepping on the territory of banks.

Lending-based crowdfunding is attractive for known industry players, which occasionally have a gap between spending and income periods. Thanks to the crowdfunding mechanism, they can quickly borrow the necessary sum. Equity-based crowdfunding is mostly used by startups that need money to start their business.

Alternative finance can help small-to medium enterprises, which are often turned away by large banks, by working  on different  terms than the banks. In this way, crowdfunding platforms have occupied the niche not covered by big investors, and don’t compete directly with them.

“Green energy crowdfunding will not disrupt banks as they can provide our customers with financial services that we can’t provide. For example, 80% of a project’s cost via a 20-year loan at less than 2%”, explained Raguet.

Banks themselves haven’t been standing back from the changes brought about by digital development. The above-mentioned annual survey showed that 32% of banks are investing in startups, and 27% are running accelerators or incubators.

Moreover, some banks in Europe are supporting sustainable crowdfunding platforms or even running their own. The banks refer to these platforms those clients who don’t fit their credit requirements or have non-standard needs. Another possible objective is a contribution to the bank’s public image.

“Renewable energy crowdfunding is changing the game for banks as they need to learn to work with us,” said Raguet.

As an illustration, Oneplanetcrowd is partnering with Rabobank and ASN Bank. Rabobank sends to the platform the sustainable energy entrepreneurs who don’t need standard bank loans. ASN Bank is collaborating with Oneplanetcrowd in running a joint crowdfunding platform Voor de wereld van morgen.

Another example is the public investment bank BPI France that opened an aggregator platform for crowdfunding TousNosProjets.fr in 2014. It has already gathered more than 1500 projects from 38 sustainable crowdfunding platforms, including Lumo. The bank describes its objective as helping crowdfunding initiatives without any particular monetary intention.

From the bank’s perspective, the aggregator platform proves its “commitment (…) to help develop the social economy and the non-profit sector, whose activities are based on the principle of social solidarity and utility,” explained Benjamin Richard, head of the project BPI France.

Representatives of Lumo, which was one of the first entrants of the aggregator, said that their intention was “to reach out to more investors and stay closely connected to BPI France”. According to TousNosProjets.fr, this objective has been reached, and their platform has become one of the major sources of Lumo site visitors.

Still, many banks follow a “wait and see” the strategy. This is often reinforced by the regulatory obstacles which crowdfunding still encounters in European countries.

But, with the European Union climate change commitments, sustainable crowdfunding has good potential for boosting green energy, bringing benefits for both public and banks.

“I do think we will both keep our own roles, and continue to do what we do best, but working together more and more,” opined Raguet.

By Alina Fedosova

Photo credits: Floriane Vita

11 January 2018

The post Green crowdfunding: disruption or opportunity? appeared first on CrowdFundRES.

Over 640 million Africans have no access to energy, which means over 60 percent of population. At the same time, the continent has abundant renewable energy sources that could fuel its energy revolution.

The UN Environment inquiry report on sustainable financing of development, amongst others, highlights the urgent need for a blended financing model combining publicly, privately, domestically and internationally sourced finances in Africa. Furthermore, in Africa, energy development must be considered a socioeconomic development and job creator accelerator. To really add value, energy sector developments should be linked to improving productivity in labour intensive industries like agriculture. Green crowdfunding’s potential contribution should be viewed within this framework believes dr. Richard Munang, coordinator of the United Nations Environment (UNEP) Africa Regional Climate Change Programme.

However, crowdsourcing will most likely need help to sustainably do clean energy’s financial heavy-lifting, he says. Not only the African context, in which crowdfunding could play a role, seems to be complex, crowdfunding models may have to adapt as well.

Spokesperson of Germany’s largest energy crowdfunding role-player bettervest, Sara Steidinger, believes that renewable energy crowdfunding, especially in poorer regions of the world, is growing. The platform raised approximately €7,2 million and saved more than 110,000 tonnes of CO₂ across 65 projects based around the world, to date. African based initiatives are riskier according to Steidinger, therefore they have higher associated interest rates. Apart from an extremely thorough financial and technical due diligence check, the platform mitigates the risk by mostly selecting projects owned by German entities.

Steidinger says due to the platform’s focus on energy efficiency, it makes sense to be involved in Africa. Moreover, apart from a positive energy dimension, selected investment projects should benefit society, allowing people to participate and earn some money. One such project, the African Briquet Factory in Ethiopia, produces briquettes out of the residue of an agricultural crop – coffee – that are a more energy efficient fire fuel, save CO₂ and allow people create an income by selling it.

Projections are that an optimised agro-industrial sector can create about 17 million jobs in Africa, and inject more than €843 billion in Africa’s economy by 2030, says dr. Munang. The UN backed pan-African platform EFABOSA (Ecosystem Based Adaptation for Food Security Assembly), founded two years ago, helps countries to build sustainable, climate-resilient food systems.

Promoting risk-sharing facilities, it incentivises private sector financing to up-scale enterprises along the entire sustainable agriculture driven, clean energy powered industrialisation continuum, explains dr. Munang. “Targeting businesses along the whole value chain diversifies default risk, lowers interest rates and enhances loan affordability,” he adds.

Dr. Munang points to rural Cameroon, where off-grid small-hydro electricity is being integrated to directly powering the processing of sustainably produced cassava and potato. Mobile apps are then used to link the products to markets and supply chains in Cameroon. “It’s in such facilities that energy crowdfunded resources should be put”, he says.

Entities like the UN “are doing amazing things but very slowly,” says South African based Abraham Cambridge, founder CEO of The Sun Exchange. The crowd-selling platform enables anyone to buy and earn rental income from solar panels on commercial rooftop space and operates on blockchain technology. Payments are made through South African rand or bitcoin. This innovative peer-to-peer model is democratising solar power, according to Cambridge. Members buy the individual solar cells solar panels for about €6 each. He says the company will soon launch projects in East and West Africa, and the Middle East.

Finally, the UK-based platform Abundance Investment, which is s part of the EU project CrowdfundRES, is observing a desire amongst its customers (ordinary United Kingdom residents) to invest in helping Africa developing solar and sustainable technologies. However, it’s not something the company will do anytime soon, says Karl Harder, founder and joint managing director of Abundance in London.

Established on a debt-based crowdfunding model, they raised just more than €62 million to date across 27 projects. Sustainability and success in long term infrastructure investment depends heavily on “well structured and mature legal and government systems, which are not always in place in the developing world,” Harder concludes.

By Marize de Klerk

8 January 2018

The post Could renewables crowdfunding assist “unplugged” Africa? appeared first on CrowdFundRES.

The next few weeks are going to be crucial for the future of renewable energy in Europe. The EU Parliament and the national governments are currently finalising their respective positions on the “Clean energy for all Europeans” package, which will shape energy policy across Europe for the next decade. On December 18, EU energy ministers are expected to reach an agreement on future laws about renewables and energy union governance.

Two of the draft laws under discussion – on the development of renewable energy and the redesign of the European electricity market – could prove instrumental in boosting Europe’s role in the global fight against climate change and in ensuring the EU meets its commitment to help limit global temperature increase to 1.5°C. The new rules would apply between 2021 and 2030.

On a number of topics the Commission’s proposal is considered weak by environmental organisations that count on the Parliament to back more ambitious targets but fear the member States might go for even less restrictive measures.

For the first time, the EU would recognise a universal right for citizens to produce, store and sell renewable electricity, free of any surcharges such as tariffs for grid connections. However, on energy democracy and the empowerment of citizens and private players, the Commission appears more ambitious than some countries. While Greece, Belgium and Hungary have expressed support for citizen energy, Spain and Germany, backed by France and the UK, seem to be putting on the brakes.

“I think we are seeing a group of States being against any more democratic efforts which have one thing in common: the protection of incumbents, delaying any transformation towards more sustainable forms of generating energy,” says Fabian Pause from the Foundation for Environmental Energy Law, a German think tank. “Of course, they can undermine the Commission´s efforts as any new legislative act needs a majority in the Council.”

Community or citizen energy has an enormous and largely untapped potential. A report by CE Delft, commissioned by Greenpeace, Friends of the Earth, REScoop.eu and EREF in 2016, showed that over 112 million energy citizens could meet 19% of Europe’s electricity demand by 2030. Now, the European Commission’s goal is a minimum of 27% in renewable energy compared to gross consumption by 2030.

“Empowerment of new actors is positive and can lead to real changes in most of the member States. The Commission’s ideas are in general well thought out, but it is still unclear if the overall system for achieving the 2030 targets is robust enough,” states Fabian Pause.

One of the means to involve citizens might also be crowdfunding. Even if not specifically named in the “Clean energy package”, “it is attracting the interest of the European Commission and Parliament, as it is regarded as an innovative financial option that shows a vast potential for financing renewable energy projects and can help bridge the existing funding gap,” explains Pablo Alonso from the EU project CrowdFundRES, which has seen platforms, renewable energy developers and other organisations join forces to boost crowdfunding.

The revision of the EU energy regulations, “which is currently being discussed following the publication of the Clean energy for all Europeans package, should ensure a stable regulatory framework that makes the electricity market fit for renewables, and foster citizen participation in financing renewable energy projects through crowdfunding. This will notably impact the further development of renewables and the way citizens and communities will engage in the energy transition over the next years,” he adds.

In this context, recent announcements show that the European Commission intends to put forward, during the first quarter of 2018, a proposal to regulate crowdfunding and P2P lending in Europe.

While the EU waits for its leaders to decide on its future for renewables, on 12 December the second anniversary of the Paris Agreement on climate change will be celebrated in the French capital at the One Planet Summit, a huge event organised by the UN and the World Bank Group. One of the panels intends to “demonstrate how the Paris Agreement framework sets a new mandate for public and private finance and why it is necessary to scale-up climate finance through public engagement and its leveraging effect on private investments.” It might be the chance to talk about the role of crowdfunding in the development of renewables.

By Selene Verri

Photo credits: Thijs ter Haar

11 December 2017

The post EU Clean energy package: more chance for “energy citizens”? appeared first on CrowdFundRES.

There is growing interest in crowdfunding as an alternative way to support projects focused on renewables. This comes at a time when the green energy sector is feeling the purse strings tighten in many European countries.

“National governments in the EU are alleged to have created a booming cycle by initially granting strong support for renewables then rapidly rowing back as they feared excessive expenses for subsidies and an increase in the price of electricity for industry”, points out a recent study by researchers from the Politecnico di Milano School of Management, the Università Bocconi, Milan, Italy and the Ton Duc Thang University, Ho Chi Minh City, Vietnam.

In the paper, titled “Crowdfunding for green projects in Europe: success factors and effects on the local environmental performance and wellbeing”, they analysed the key factors that made a wide sample of crowdfunding campaigns through specialised platforms successful. Moreover, “to our knowledge we are the first to document the positive effect of crowdfunding” on “environmental performance and wellbeing at the local level”, they claim.

youris.com met one of the authors, Giancarlo Giudici, associate professor of corporate finance at Politecnico di Milano.

Crowdfunding and renewable energy. Why does this relationship seem to work?
Through crowdfunding, sponsors of green energy projects are able to involve local communities in the ownership and financing, raising awareness about sustainability. In crowdfunding, pledgers are typically motivated by both financial objectives (i.e. making money) but also by intrinsic objectives (i.e. helping reduce carbon emissions and pollution).

What are the main factors that are boosting the use of this alternative source of funding?
Investments in green energy are struggling in developed countries. Many countries like Italy have already reached the 2020 Kyoto objectives, and governments are reducing feed-in tariffs and incentives, this is hampering investments from institutional investors and funds.

Which countries pioneered crowdfunding to finance renewables and which the ones are emerging in this sector?
Green crowdfunding portals appeared in the 2000s in the US, UK and Nordic countries, where there is widespread sensitivity to environmental topics. We expect that they will now rise in developing countries like China (and in the Far East), in Africa and South America where large-scale projects are now being implemented in the hydroelectricity sector, in photovoltaics and wind turbines. But in the future we expect investments also in small-scale projects which can also be financed through crowdfunding.

In developing countries energy is lacking in many regions, especially rural villages. Green crowdfunding can make the difference and bring energy in order to increase wellbeing and stimulate entrepreneurship.

Could you describe the typical investor in green crowdfunding? And why do women usually represent a very small share as highlighted, for example, in a report recently published under the EU project CrowdFundRES?
Investors are typically aged between 40 and 50, with women being less likely to be investors. Several studies show that women are more conservative in selecting financial investments. Crowdinvesting is more risky compared to the subscription of bonds and securities listed on stock exchanges, and this can explain why men are major contributors.

Is the EU on the right path towards harmonising national regulations in the sector, allowing safe cross-border investments?
At the moment the European Commission has decided to hold back on any common framework in crowdfunding rules. The reason is to avoid additional ties in the ecosystem. Therefore, national rules govern the market. We think that there are no threats at the moment, since European crowdfunding portals have to comply with MIFID rules. Yet the EU is paying special attention to this and is promoting surveys and consultations to issue recommendations where needed.

Which are the most interesting results of your last paper focused on crowdfunding for renewables in Europe?
Our paper studies the success factors of 423 green projects published on 27 specialised crowdfunding platforms in Europe, and we aim to test if the growth of green crowdfunding has contributed to increasing environmental performance and wellbeing at the local level. We find that, in line with the assumption that pledgers are moved by both financial and intrinsic objectives, projects delivering some monetary or tangible benefit to the local community and equity-based projects are more likely to reach the funding target.

Powerful explanatory variables include levels of social freedom, trust in institutions, quality of public services, pollution and incumbent production of renewable energy at the local level.

How did you measure the social impact of crowdfunding?
We adopted two measures of environmental awareness and green achievements. The first one was the Environmental Performance Index (EPI). It ranks countries’ and territories’ performance on high-priority environmental issues in two areas: protection of human health and protection of ecosystems. It was developed jointly by the Yale Center for Environmental Law and Policy, Columbia University, the World Economic Forum and the Joint-Research Centre of the European Commission. The second dependent variable was the Social Sustainability Index (SSI), developed from 2006 by the Sustainable Society Foundation, integrating human and environmental wellbeing.

By Loredana Pianta

Photo credits: Victoriano Izquierdo

The post Social impact of green crowdfunding appeared first on CrowdFundRES.

German debt crowdfunding platform bettervest started by backing domestic renewable energy projects, but since 2015 has also focused on expansion into Sub-Saharan Africa and now India. Its first two investments in India, €400,000 split between Mera Gao Power and Boond Engineering, are already in progress.

Mera Gao is using the money to construct 200 micro-grids (each with 240Wp capacity), which will service 4,000 housesholds and 24,000 people in Uttar Pradesh state with 7 hours of power per day. Boond plans to build 24 micro-grids that are 1kWp each in capacity, with the aim of reaching 5,760 people in northern India with 24/7 power.

Fynn Hauschke of bettervest said that there is growing demand for crowdfunding from micro, small and medium enterprises (MSMEs) in the Indian energy access sector, but the regulatory environment for debt and equity crowdfunding (also called “crowdinvesting”), as practiced by bettervest, is still unclear within India.

Read the full article here

The post Crowdfunding tapped as new finance path for rural electrification in India appeared first on CrowdFundRES.

The European PV solar energy conference EU PVSEC was taking place at the RAI Convention Centre in Amsterdam gathering a great number of relevant actors involved in the Solar sector to explore the current trends in solar technology and market deployment.

On this occasion, the CrowdFundRES consortium organised a final workshop “crowdfunding PV projects” which gathered more than 40 participants interested in the ins and outs of crowdfunding and its potential for the development of new RES projects.

The event was hosted by Pablo Alonso and Silvia Caneva (WIP Renewable Energies) who welcomed the participants. Pablo Alonso (WIP Renewable Energies) explained the frame of the CrowdFundRES project funded under the Horizon 2020 research programme. He presented the overall concept of crowdfunding and its results delivered by the partners since two years: surveys, case studies, analysis of the relevant regulatory framework, guidelines for project developers, for crowdfunding platforms, and for investors, and policy recommendations.

Oliver Gadja (ECN) explained then in details what crowdfunding is about, which are the leading countries, and what are the challenges at EU level, notably the issue of disparity of legislation and difficulties platforms face for being allowed to finance through crowdfunding a project located outside the country of residence of investors.

The session II was focused in the Crowdfunding Platforms perspectives. The platform partners in CrowdFundRES project, Robert Van Maaren (Abundance), Maarten De Jong (OnePlanetCrowd), and Alex Raguet (Lumo) showed participants how renewable projects got concretely funded thanks to crowdfunding. The fact that each country (UK, Netherlands, France) has its specificities raised questions, and notably on how to fund projects in different countries to the ones presented in the panel. The presentations were very much appreciate among the participants whom showed interest in the concept and surprised of the potential different conditions to fund a RES project. The solar park Torreilles project that Lumo and OnePlanetCrowd commonly crowdfunded shed a positive light on how to overcome barriers to cross-border crowdfunding.

The last session enabled a focus on concrete projects and opportunities in the Netherlands. Dennis De Jong (Holland Solar) explained how much solar development is linked to more empowerment of consumers and the local added-value of that source of energy. Projections of new capacity for solar are very positive in the Netherlands in the coming years. Crowdfunding can be a way to participate in this trend.

Roderick Van Wisselingh finally presented the business model developed by Solease: the leasing of solar panels. It allows any citizen to consume clean electricity self-produced on the roof without bearing the initial investment costs. They pay a fix amount monthly and benefit from the savings allowed by net-metering schemes in place in Holland. Such a progressive business model allowing any citizen to become a prosumer was allowed thanks to crowdfunding, and notably loans raised through the OnePlanetCrowd platform. It is worth-noticing that net-metering schemes are jeopardized by the upcoming revision of the EU energy legislation, as the Commission proposed to ban them. This recalls that consistent support policies for renewables are still at the heart of crowdfunded projects, and that policy makers need to take into account the policy recommendations developed by the actors of both sectors.

The workshop then came to an end with a networking cocktail in which the participants of the workshop were invited to share their thoughts and contacts.

Download the agenda of the workshop.

All presentations are available for download below.

Session I – Welcome

• Agenda & Overview of the CrowdFundRES Project – Silvia Caneva and Pablo Alonso, CrowdFundRES Coordinators, WIP Renewable Energies
• Crowdfunding as alternative way for project financing – Oliver Gajda, Executive Director of ECN, European Crowdfunding Network

Session II – The Crowdfunding Platforms Perspectives

Selection of PV projects financed by crowdfunding: 

• Abundance – Robert Van Maaren, Operations executive of the crowdfunding platform Abundance, United Kingdom
• Oneplanetcrowd – Maarten de Jong, Commercial director of the crowdfunding platform Oneplanetcrowd, The Netherlands
• Lumo – Alex Raguet, President of the crowdfunding platform Lumo, France

Session III – The point of view of Citizens, Policy Makers and Project Developers

• Crowdfunding fuels our growth – Roderick van Wisselingh, Solease, The Netherlands
• Solar energy for and by the people – Dennis de Jong, Holland Solar, The Netherlands & Managing Director Solar Century Benelux
• Overview on the legislation – Tanja Aschenbeck-Florange, Osborne Clarke, International legal practice

23 October 2017

The post Crowdfunding renewable energy projects in Europe: a reality and bright perspectives appeared first on CrowdFundRES.

As a new platform in the crowdfunding business, which is a fast-changing market, one needs to thoroughly analyse and understand its target clients. To generate adequate dealflow requires an understanding of the target markets and a strong network within a sector. One step are emailings and expert networking events, but it will require more dedicated actions to engage relevant participants. Building a deal pipeline successfully is challenging as well as time-consuming. (Remark: The CrowdFundRES guidelines for platforms provide answers to these and other questions to facilitate better understanding and decision-making to new platforms.)

Another way of finding suitable projects (clients) for a newly launched RES crowdfunding platforms could be to look into tailored portals that focus on the sector. The European Investment Project Portal (EIPP) is one of these portals and it displays a range of European Investment Projects in renewable energies, energy efficiency and other sectors. CrowdFundRES recommends this portal to those crowdfunding platforms that want to expand their operations to the renewable energies field or that have recently launched their business and are looking for project developers and an investor base.

Please follow this link to the EIPP

By Kathrin Kohl

The post How to find new projects and build an investor base as a newly launched crowdfunding platform appeared first on CrowdFundRES.

Solar parks proliferate in Europe and boost development of renewables, but the issue of land use is often raised. A new trend is to produce energy and cultivate crops at the same time, in other words use agrivoltaic systems.

One example is the Torreilles solar park, in the South West of France. The plant’s total power capacity is 9.6MW and stretches for 43 hectares along the so-called “Route du soleil”, near Perpignan. It can produce 14,000,000 kWh per year, enough to supply 5,200 families or allow 1,400 electric cars to travel around the world, saving 1,100 tons of CO_2.

The system consists of 96 greenhouses equipped with solar panels. It hosts an “organic” poultry farm, which is free-range, with the animals fed on grains grown on site. Fruit plants are also grown, with a section for exotic species.

The Torreilles park is innovative not only for its structure, but also for its financing system linked to a European cross-border campaign to crowdfund renewables. Platforms Lumo, based in France, and Oneplanetcrowd, in the Netherlands, co-financed the project collecting 800 thousand euros in two rounds, coming from 350 French investors, and 130 Dutch investors.

Nowadays, starting a campaign involving projects and investors from different European countries is not easy. “Investment regulations are not harmonised between States,” Olivier Houdaille, general director of Lumo, tells youris.com, “The biggest challenges were to make sure that no rule was breached and that investors understood the proposed framework.”

“Simply said, a platform can only offers its services in its own country, unless it gets a permit in each country where it’s active. Thus crowdfunding, also born to streamline bureaucratic procedures, ends up mediating between different regulatory frameworks,” explains Maarten de Jong, general director of Oneplanetcrowd. “We met Lumo during the EU project Crowdfundres and we were both eager to make a crossborder project work. So we discussed and jointly developed a solution to allow investors from both countries to have the same financial conditions.

“The owner of the park (the Irish renewable energy developer Amarenco) set up a dedicated intermediate structure, with a governance granting Lumo with the required control to protect investors’ interests,” explains Houdaille. The local entity, called Amarenco Crowd SAS, is a special purpose vehicle (SPV) to which the investors of Oneplanetcrowd provided a loan. Lumo was in the board of this entity.

With the capital of the crowd, the SPV bought bonds issued by the Torreilles project entity, Ferme PV6 SAS. The payments of the bonds are then used to repay, through the Oneplanetcrowd platform, the Dutch investors who, thanks to this solution, have had the same financial conditions (three-year payback period, five percent annual interest rate) as the investors of Lumo.

“With this campaign French and Dutch investors contributed together to fund the same project, managed by a platform of its own regulatory area,” says Houdaille.

Many of the constraints limiting the action of the platforms result from the lack of a European crowdfunding market. “A EU wide crowdfunding license would be ideal but is not realistic at this point in time,” claims de Jong. “The best option would be to make the MiFID license really work as a passport, giving easy access to all the EU nations. This is not the case. Local limitations apply even though you have MiFID.” (Editor’s Note: the “Markets in Financial Instruments Directive” has been in force since 2007. It will be updated in 2018 to increase transparency across the EU financial markets. The current EU regime provides a reasonable degree of risk mitigation, due to disclosure requirements and classification of risk profiles of the investors).

Lumo and Oneplanetcrowd have opened up a path. The Torreilles scheme is tailor-made for French and Dutch rules but “it could possibly be extended to other European countries,” Houdaille says. Nevertheless, action at the EU level is required, he adds: “We proved that we can somehow partially overcome the obstacles by ourselves, but the cost of it is a burden on platforms. The equivalent money and energy could be saved and then reallocated to launch more crowdfunding campaigns.”

By Paolo Fiore

The post Overcoming borders to crowdfund green energy appeared first on CrowdFundRES.

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The post Beyond the borders: Renewable energy crowdfunding in Europe appeared first on CrowdFundRES.

Can “cryptocurrencies” encourage green-tech? Nowadays virtual means of payment are in use as an alternative to our existing currencies. Among them is SolarCoin (§), created to reward solar energy producers and to give an incentive to others considering installing solar panels.

Anyone who produces solar energy, on their roof or in a solar park, can submit meter readings of their energy production and receive these digital coins as a reward – to the tune of one SolarCoin per megawatt-hour (1§ per MWh).

Like all cryptocurrencies, this digital coin is based on blockchain technology. Traditionally, individual account details and financial transactions have been centralised in private databases (such as banks). In contrast, the blockchain is an open database spread across a vast network of computers that publicly records an ever-growing list of transactions, each called a block.

“We use SolarCoin to incentivise people to produce solar power, but we need market awareness and education about blockchain. Getting recognition from governments and large institutions like the UN would help establish trust,” says François Sonnet, co-founder of ElectriCChain, the blockchain underpinning SolarCoin.

One organisation that has embraced the solar cryptocurrency is the French crowdfunding platform Lumo. To date, they have raised around three million euros for around 30 projects, including an €800,000 investment in a French solar park. “Most investors are local citizens who want to see their money work,” says Alex Raguet, co-founder of Lumo. “Every year you receive three to seven percent interest,” he explains, “and you get the capital back at the end.”

In 2016, Lumo adopted the virtual coins to reward investors in solar projects and to demonstrate the green credentials of the investment. “Our crowdfunders get the SolarCoins that their money is helping to produce,” says Raguet. “The coins, which can be traded freely, are currently worth around €0.20 but the value could increase if carbon taxes are introduced.”

But how green are cryptocurrencies? Bitcoin, the first and most well-known cryptocurrency is notoriously energy-greedy. It uses massive amounts of computer power to solve the puzzles, or algorithms, to “mine” coins, and was estimated to have the same energy consumption as the Republic of Ireland in 2014.

Rather than guzzling electricity, “SolarCoin only uses three to five percent of the energy [of Bitcoin],” says Sonnet, “You don’t need to buy servers to mine the cryptocurrency.”

SolarCoin could be even fairer, according to Michele Andrea Kipiel, a self-taught blockchain expert and blogger in Rome. “The 1 MWh production target is fixed and too high to attain for a normal family house with solar panels on the roof,” he says. This favours mass producers. The digital coin could be made more accessible by replacing the fixed production target of 1 MWh with dynamic production targets personalised to each producer, explains Kipiel in a recent blog post.

For fintech tools like cryptocurrencies and crowdfunding platforms to move from the niche to the mainstream, regulation needs to catch up with innovation. “We had to do a lot of lobbying to create a framework for Lumo to operate in,” says Raguet, adding that they became operationally functional only in 2014, when regulations had been put in place.

France wasn’t the only country in Europe with a lack of framework for such projects. “For the energy transition to be successful it has to be at the European level,” says Raguet. In this context, the CrowdFundRes project, in which the French platform is involved, aims to improve the regulatory framework and public understanding of crowdfunding for renewable energy projects.

By Fiona Dunlevy

Photo credits: Solarcoin

19 July 2017

The post ‘Fintech’ helps power the green energy revolution appeared first on CrowdFundRES.

The post Fourth CrowdFundRES Newsletter – July 2017 appeared first on CrowdFundRES.

Download the report here!

The post Policy recommendations on regulatory and market framework improvements for crowdfunding RES projects appeared first on CrowdFundRES.

Recent French and German incentives schemes to engage citizen in the roll-out of renewables demonstrate two things. Firstly, there is a real move towards greater financial involvement of citizen. Secondly, there is no common approach across EU Member States.

French r/evolution

Beginning this year France put a novel incentive scheme in place. Renewable producer can sell electricity up to 5% higher for the next 20 years, if citizen hold 40% of equity during the first 3 years of production or longer.  It applies to all technologies: Solar, Wind Hydro, Biomass.

The impact is immense. An approximate of 8 GW of renewable capacity is expected to be built between 2018 and 2021. It implies French citizen may contribute up to EUR 300 Mio to the roll-out.

Crowdfunding and cooperatives are involved. For example, CrowdFundRES partner Lumo France already co-financed a 9,6 MW solar park in Torreilles, sourcing over EUR 800 000 from the crowd.

“Thank to this new incentive, our market is growing strongly and we see interest from almost every developer.” – Alex Raguet, Lumo-France

German wind

Germany took a different direction, benefitting cooperatives for on-shore wind projects.

In May 2016, the State Mecklenburg-Vorpommern passed a new law governing on-shore wind. For new capacity, at least 20% of the finance shall be sourced from citizen living within a perimeter of no more than 5 km. Since voting rights are a necessary criterion, crowdfunding is out of the picture.

Germany’s first onshore wind auction on May 19th 2017 was another landslide victory for cooperatives. 96% of the rights, 776 out of 807 MW were awarded to cooperatives. The auction design favoured cooperatives vis-à-vis other participants in several manners, such as: cooperatives got the highest price of all bids, realization deadlines were 54 instead of 30 months and financial securities and permit rules were less stringent.

Conclusion

The approach taken by France and Germany couldn’t be more different. In France, citizen invest alongside professional investors via crowdfunding or cooperatives. Regulation is technological-neutral and does not favour one particular corporate structure. In Germany, regulation and auction market design for wind energy clearly benefits cooperatives, leaving crowdfunding out of the picture.

Yet, companies and citizen are already thinking and working cross-border. The recent cross-border campaign between the French and Dutch crowdfunding platforms Lumo-France and OnePlanetCrowd show that market forces and citizen engagement is not limited to national and regional borders.

By Sissy Windisch, bettervest GmbH/Green Crowding

23 June 2017

The post Incentive schemes for citizen: Will the French energy r/evolution inspire the rest of Europe? appeared first on CrowdFundRES.

EU Green Week is urging us to think about the environment, as governments face pressure to boost renewable energy sources.

With state subsidies falling, crowdfunding platforms are increasingly stepping in to help make green power projects a reality. For individual investors, injecting anything from a few euros to hundreds of thousands, they are a tangiable alternative to banks – offering attractive returns, while helping the environment.

One platform, London-based Abundance Investment, raised around 760,000 euros to help fund solar power systems at 19 schools in the UK. It’s collaborating with the European CrowdFundRES project, which aims to put crowdfunding at the heart of the energy transition.

By Damon Embling

29 May 2017

The post Crowdfunding boosts green power appeared first on CrowdFundRES.