A practical guide for Crowdfunding Platforms, Project Developers, Investors and Policy Makers
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
29 January 2018