Crowdfunding Power: Solving Climate Change and Other Community Needs
Thursday, July 18, 2013
By Sangeeta Haindl
Crowdfunding could be an incredibly powerful way to deliver a decentralised energy system. In Germany, over 50 per cent of renewable energy capacity is now community-owned. Online crowdfunding or peer-to-peer (P2P) lending allows individuals to lend or raise money for projects directly. The latest player to appear on the P2P lending scene is Abundance, set up by Bruce Davis, one of the founders of P2P pioneer Zopa. It invests specifically in renewable energy. Having funded three renewable generation schemes, two solar and one wind, it has raised £2.3 million through crowdfunded finance.
Davis says, “We’re looking at funding projects in the £1 to £4 million range, up to £10 million. So far 600 individuals have invested an average of between £1,500 and £2,000. There is a minimum investment of £5 and we do get people putting in £5. Everyone gets the same return based on a share of the revenues from selling the energy… the return on the current project is between 7.35 per cent to 8.6 per cent depending on the amount of sunshine estimated at that site.” He rejects the idea that renewable energy is a risky investment. A local hydro scheme on the Thames in Osney raised all the money needed in ten days from lots of individuals giving relatively small sums.
Yet the most important contribution crowdfunding makes to renewable energy is about engaging people more directly in their energy future. On a community and a financial level, it makes people feel more included in the process and not as though it’s been imposed on them. Spreading ownership more broadly is more likely to create the political permission to do more.