The need to find an alternative source of energy is more important than ever before. This has resulted in groups and communities turning to crowdfunding renewable energy. And in doing so often taking financing into their own hands with the backing of a crowd of supportive contributors.
A number of goals have been set by governments and policymakers to transition to at least 85 percent renewable energy by 20506. Meanwhile, many environmentalists and activists are pushing for even more ambitious targets. Regardless of the quantum to achieve the switch to renewable energy different types of investment will be required.
The technology that enables us to harness different types of renewable energy, including wind or solar energy, is out there but the funds and access are often insufficient. Therefore, we are as yet unable to supply homes and businesses with 100% clean renewable energy. Crowdfunding renewable energy projects may well present part of the solution.
Crowdfunding provides people with the chance to invest often smaller amounts than normal with institutional funders into initiatives and ideas. A relatively recent phenomenon, high profile companies across different sectors including Oculus (virtual reality) and Brewdog (craft beer) were funded by crowdfunding. Demonstrating that crowdfunding can certainly help ideas get off the ground.
So, when it comes to renewable energy, crowdfunding platforms make it possible for communities and groups to fund renewable energy projects2. The wheels of big energy companies might not turn as fast as some would like. Therefore, crowdfunding is a great way of raising funds to get new and often smaller projects off the ground and up and running.
Crowdfunding presents other benefits. Crowdfunding makes it possible to raise money while also enhancing the profile of a project. And links in a number of supporters and fans to the success of the initiative. What’s more, it is often easier than obtaining a loan from a bank.
Further, it provides investors with the opportunity to support a local project that can offer solid returns.
Typically companies target a sum of money for equity or benefits. For example, Brewdog offers its crowdfunders a lifetime discount in its bars. Oculus is widely regarded as one of the most successful crowdfunds to date. They offered all early supporters a free special addition product when it launched. In turn, raising a staggering $2.4m.
The target sum a company looking to crowdfund is pitching for is made accessible to a range of investors. In turn. they can choose to invest and contribute towards the target. As a result, making smaller investments both attractive and accessible to people keen to support new ideas. This is likely to prove even more important as we move to realize the many advantages of renewable energy.
Fortunately, for those who are eager to start a crowdfunding project, there are many platforms available. Meanwhile, helping fund innovation and clean energy projects, specialist renewable energy platforms have also started to appear.
These platforms facilitate entrepreneurs or communities linking up with investors. Often platforms will present a number of opportunities, and help to market them as well. Typically crowdfunding opportunities on these platforms are open for a set time limit during which they are required to meet, or exceed, their funding target.
Further, they also provide investors with the necessary information and manage the process to proceed to an investment. For example, looking after legal agreements and transferring funds to the company.
Renewable energy crowdfunding projects can range from books to help teach children about renewable energy. Through developing renewable energy inventions for microbial fuel cells. Even helping to fund plane flights powered by renewable energy, renewable energy sculptures, and new ideas for renewable energy battery storage.
If a business, entrepreneur, or community has an idea to crowdfund for a renewable energy project then it is imperative that they use the correct platforms4. This choice depends on the stage of the project and the type and size of any required investment.
Here the clue is in the name. Kickstarter gives new projects an often welcome boost to get started. Creators on the platform offer rewards rather than equity, typically related to the product. They appeal to a whole range of sectors, including renewable energy. As such Kickstarter has become popular with everything from inventors to artists and publishers.
At the time of writing Kickstarter lists 115 renewable energy projects. Projects on Kickstarter are generally early stage, hence you’ll be helping an idea come to life more often than not. And as rewards are not financial Kickstarter usually doesn’t provide a financial return per se.
StartEngine makes it possible for people to turn their ideas into reality. Working with small businesses and entrepreneurs has already helped 150 projects raise equity finance. Both in and out of the renewable energy sector.
In fact, this crowdfunding platform also links up larger businesses and projects. It provides investment opportunities for funders, as they are purchasing stock and betting on the ideas of more mature companies raising larger amounts. As a result, it means that funders have to consider projects thoroughly and in turn stand to do well if the company they invest in grows in value.
Citizenergy specializes in sustainable energy projects, facilitating the public to get involved. It gives funders the chance to own equity, loan finance, or purchase a bond in renewable energy projects throughout Europe. In turn, championing quite how important renewable energy is in our fight against climate change and providing projects access to essential finance.
This platform is serious when it comes to providing investment opportunities. As it is co-funded by the Intelligent Energy Europa Programme of the EU, it combines investment opportunities from small platforms into a central platform. As a result, this platform carries a lot of value as it vets and aggregates some of the best energy investment opportunities.
Lumo is a French crowdfunding platform, originally started by entrepreneurs and now owned by the large French bank, Société Générale. The platform predominantly allows smaller sums to fund sustainable energy projects. Rather than selling equity, investors receive a return in interest derived from the green energy that the projects generate and sell. With the bank’s acquisition of the platform its thought that they will develop to support larger projects backed by the bank’s clients.
Fundeen is another renewable energy specialist based in Madrid, Spain. They describe themselves as a fintech, allowing investors to choose renewable energy projects to invest in from as little as €500. A relatively new platform that began life in 2017 founded by two brothers, the platform already enjoys the support of the European Commission and the Spanish ministry of industry, commerce, and tourism. We wish them luck as they develop as new tech-first specialists helping link investors with sustainable energy projects that deserve every success. And in turn, helping these projects demonstrate the role renewable energy has in reducing the impacts of climate change.
Triodos is a UK bank that offers a wide range of financial services to support “for good” projects. They have raised over £133 million for organizations that have objectives to improve the lives of people or help the planet. The Triodos crowdfunding platform is still relatively new having launched in 2018. The platform offers bonds and share offers for community hydro, solar, and wind projects.
Similar to Triodos, Abundance renewable energy crowdfunding opportunities offer a number of projects providing a financial return. To date, the platform claims to have secured nearly £100m in investment and returned £22m. The projects are larger than some of the other platforms and include everything from tidal turbines to supporting farmers with clean renewable energy.
If you’ve got an idea or project in the renewable energy space crowdfunding might be for you. It’s not for every idea and project and you should carefully consider the pros and cons and the other options you might have available to fund your project.
If you’ve decided to crowdfund your renewable energy project here are some tips for success:
There have been a number of successful crowdfunded renewable energy projects across the globe. However, if you are someone who wants to invest in a crowdfunded renewable energy project or you want to create your own, then it is always worth speaking to others.
Speaking to individuals who have been through the process will provide you with invaluable information in every area of crowdfunding. What’s more, crowdfunding is a community-driven process. It brings investors and entrepreneurs together, therefore, sharing information and discussions are all part of the experience.
Many successful crowdfunding campaigns will have gone before yours. Do your research and try and work out what it is about the most successful ones that have helped them along the way. Look at how they message, what facts they present and how they tell their story. The more you prepare for success the better your chances.
Don’t go for too much money, or too little. Be realistic with the ask according to the stage of your business. Investors will quickly sniff out problems with your idea or business and presenting a realistic picture and ask is better than having problems down the line. Many platforms will offer advice too as they want you to succeed. Be sure to ask them, they’ve done it many times before, and include their feedback in your plans.
Crowdfunding platforms won’t be able to guarantee you that you’ll reach your target. Regardless of which crowdfunding platform is right for your project, Furthermore, they can only do so much. Therefore you'll need to be ready to promote your campaign. A key aspect of a successful crowdfunding raise is to promote it far and wide. Share it with friends and family and ask them to pass it on.
Use social media to help it gain as much exposure as possible. Further, reach out to your network. To do so, prepare a marketing campaign in advance, linking invites to participate, follow-ups, and updates. This will help you reach as many of the right potential investors as possible. And invite them to consider your proposition. And crucially don’t be afraid to sell it wherever you can, if you believe in it and it comes across others will too.
Creating a video is an almost essential part of crowdfunding. It's a great way to tell your story, explain why your project is needed, and make a case for investing. Don’t forget you’re talking to investors and therefore avoid your communications being just about you and the project. Rather think and ensure you include in balance what's in it for them.
Most crowdfunding platforms and campaigns will present a little bar showing percentage progress towards reaching your target. A crowdfund that doesn’t have any investors looks like other people have chosen not to chip in. As such, rally support before actually launching the campaign and ask them to come in early. A quick-moving bar with investors committed looks far better for others that might be on the fence.
So, all going well you’ve succeeded in raising the crowdfunding you need. Don’t forget, after a little celebration, that all of those investors will now be keen to see you deliver. Therefore, make a plan to keep them up to date with progress. In many ways, you can never communicate too much. And an investor has already bought into you and the concept and can become important advocates if you keep them abreast of what is going on. And deliver the project and the return they are hoping for.
For those who are looking to invest, there are plenty of opportunities to do so. Some of the top crowdfunding platforms out there are offering investors the chance to become part of something unique1.
As such, there are growing numbers of start-ups and innovative businesses pushing boundaries, with the aim of delivering renewable energy on a new level. As we need to do more, these initiatives are not just about delivering energy on a large scale. In some cases, they are about providing small communities with the chance to benefit from the energy that they never had.
This can range from installing offshore wind farms or building small-scale solar farms. Through providing electricity to local communities around the world. Taking inspiration from the world's biggest solar projects to the biggest wind farms through realizing the advantages of wind energy or solar energy, these initiatives are changing lives.
Flower turbines are an initiative that aims to change the way in which wind energy is utilized. This company believes that wind energy has yet to reach its potential and its technology is aimed at addressing a large market.
Traditional wind turbines require space in order to operate effectively3. However, flower turbines have a unique design which means that they can produce as much as 50% more electricity when correctly spaced out. It enables smaller wind farms to generate more energy and it makes it possible for homes and businesses to utilize the space that they have.
This crowdfunding project involves the installation of 960 photovoltaic solar panels in the Grand Port Maritime of La Rochelle. This small initiative alone will provide enough energy for 100 homes.
As it currently stands, almost 60 investors have invested in the project. So far, it has raised 40,000 Euros. Investors are also benefiting from interest of 4.5% gross.
This project has also made another commitment to protect the environment. Once the panels reach the end of their life5, they will be recycled by the PV Cycle association.
This solar project in Kedougou, Senegal aims to change the lives of families. By providing electricity to homes using solar systems, 810 people will have access to clean electricity.
This community will benefit from lighting and the ability to charge devices they previously didn’t have. Around 80 people will also have access to a TV. In turn, allowing them to connect with the outside world. Further still, the project is helping to make communities safer as it prevents the burning of straw and torches. As such, it has also prevented 197 tonnes of CO2 from entering the atmosphere.
These are just a small selection of some of the projects taking place around the world. However, they highlight the importance of crowdfunding and the difference that renewable energy can make to communities.
In the UK alone, more and more people are investing in crowdfunding projects. However, France is leading the way in crowdfunding with Germany following closely behind. All of this proves that crowdfunding has serious potential.
The “Crowdfunding Renewable Energy” eBook from the European Union claims that over 1,000 investors had committed more than 10 million Euros for individual projects in Europe by February 2018.
For example, one of the most successful campaigns is the Toreilles Solar Park in France. Here, 96 greenhouses contain a total of 37,000 solar panels, while it saves 1100 tons of CO2 each year. Supplying electricity to 2,500 homes generates a total of 9.6MW of clean, green renewable energy.
Another, the Small Wind Co-op is an energy co-op that owns turbines in Scotland and Wales with England coming on board soon. The project was funded to provide homes and communities with clean energy. Allowing the community to no longer rely on big energy companies. Here, members own and run the entire project providing complete control.
Our reliance on energy that comes from fossil fuels can no longer go on. Innovative energy companies are doing their bit yet in many cases progress is too slow. As a result, crowdfunding offers communities, entrepreneurs, and businesses the chance to take control.
From solar power, wind power, or other forms of renewable energy, it is possible to generate our own energy. Clean energy is the future and crowdfunding these projects is a great way to move forward. Estimates suggest that the population is going to grow to ten billion by 2050. If we continue to use non-renewable energy, then we are going to cause a huge amount more damage to the environment. There’s little doubt we need to accelerate our switch to renewable energy.
We still need vast amounts of investment in large projects on a global scale. Meanwhile, the small projects driven by entrepreneurs and investors will prove more important moving forward., A chunk of these projects will demonstrate that crowdfunding certainly enables us to turn to renewable energy as an alternative.
|Hörisch, J. (2018) ‘‘Think big’ or ‘small is beautiful’? An empirical analysis of characteristics and determinants of success of sustainable crowdfunding projects’, Int. J. Entrepreneurial Venturing, Vol. 10, No. 1, pp.111–129.|
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