Crowdfunding, a popular way to finance solar

What do solar panels on 20 community buildings in Nottingham in the UK and a solar park in Langenbogen, Germany, have in common? Both projects have been financed through crowdfunding platforms. Peer-to-peer lending for clean energy has become  popular in recent years and the European Crowd-funding Network (ECN) devoted to this topic its annual “crowdcamp”, on May 24 in Brussels.

Data presented at the event show a staggering growth, from 3 crowdfunding platforms in 2006 to 459 in 2016. 8 % of them raise money for renewable energy projects. “Clean energy and energy efficiency need a lot of investment and many people want to be part of this economic transition,” says Michael Brey, responsible for corporate communications at Econeers, a site raising funds for renewables in Germany. “We expect this market to keep going strong.”

Why it is attractive

According to the European Crowdfunding Network, the country with most platforms for the renewable energy sector is Germany (13), followed by France (10), the United Kingdom (8) and the Netherlands (5). CrowdfundingHub, a research and consultancy
network in the Netherlands, places the UK at the top of the Alternative Finance Maturity Index, which measures countries’ readiness for new forms of finance. What makes the UK so attractive are the regulatory environment and tax reliefs granted to this type of investments. The Netherlands, France, Estonia and Germany follow among the top performers, while Slovenia, Luxembourg, Hungary, Malta and Lithuania are at the bottom of the ranking.

Entrepreneurs and investors alike say that crowd financing offers benefits that are difficult to find elsewhere. […] Small and independent developers can access funds not available through the usual channels. From the investors’ perspective, the possibility
to choose where the money goes is a strong motivation. […]

Many seem to accept that any investment involves some level of risk and the market is too young to be guided by relevant statistical data. But as the volume of transactions grows, regulators keep an eye on the situation.

The full article was published on Sun & Wind Energy magazine in August 2016.