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Unleashing the potential of Crowdfunding for Financing Renewable Energy Projects

Periodic Reporting for period 2 - CrowdFundRES (Unleashing the potential of Crowdfunding for Financing Renewable Energy Projects)

Reporting period: 2016-08-01 to 2018-01-31

We are currently seeing a deceleration of renewable energy growth in Europe. This is partly attributed to the challenges for financing renewable energy projects. Reduced access to conventional financing options over the past few years has triggered innovative financing schemes to emerge, with crowdfunding attracting a lot of attention.

The CrowdFundRES project, funded by the European Commission, identified the vast potential of crowdfunding as a tool to contribute to the acceleration of renewable energy growth in Europe by unleashing the potential of crowdfunding for financing renewable energy projects.

In order to achieve this, the work has been structured around the following objectives:

1. Gain a deep understanding of the public’s perception of crowdfunding.
2. Analyse the challenges faced by the application of crowdfunding for renewable energy projects in Europe.
3. Develop guidelines that support easier, more effective and wider accepted practices in crowdfunding renewable energy projects.
4. Apply the guidelines and review them based on practical experience.
5. Improve the market and regulatory framework.
6. Promote the crowdfunding concept and its advantages among those who could contribute or raise funds.
"The CrowdFundRES project has delivered the following results in line with its objectives and milestones:

A review and update of crowdfunding regulation and RES market developments was conducted providing a detailed overview of the fast-changing regulatory conditions in all 28 EU Member States.

Three online surveys were conducted at the European level, one regarding public perceptions about crowdfunding in the renewables sector, with the others examining the views of crowdfunding platforms and RES project developers.

10 Case studies from Europe’s leading RES crowdfunding platforms were reported providing a detailed view of how platforms operate as well as an overview of individual RES projects that have raised funds on the respective platforms.

2 European workshops were organised, one with crowdfunding platforms and one with renewable energy project developers around Europe, where input to guidelines for crowdfunding platforms and project developers was collected and insights for policy recommendations were discussed.

Likewise, 9 national workshops with platforms and RES project developers were organised covering the 6 target countries. (Austria, Belgium, France, Germany, the Netherlands and the UK)

1 European Policy Workshop and around 15 policy bilateral meetings were held. The participants included project partners, policy makers, representatives of RES associations as well as representatives of crowdfunding platforms involved with RES projects. These activities aimed at identifying opportunities and challenges associated with the implementation of the developed policy recommendations.

Policy recommendations were formulated to help improve the market and regulatory framework for crowdfunding and renewables in Europe

A series of guidelines for crowdfunding platforms and project developers were developed and applied aimed at supporting easier, more effective and wider accepted practices in crowdfunding renewable energy projects. Additionally, an investors guideline was drafted to enable investors to make well-informed decisions and facilitate better understanding before engaging in crowdfunding.

Practical experience gained from the application of the guidelines was demonstrated through 8 crowdfunded projects listed on the partner crowdfunding platforms during the last 18 months of the project.

Form the above mentioned, it is to be noted the unprecedented collaboration between Lumo and Oneplanetcrowd, crowdfunding platforms based respectively in France and in the Netherlands, that joined forces to overcome the issues related to cross-border crowdfunding.

Measures were taken during the CrowdFundRES project to support new crowdfunding platforms and existing crowdfunding platforms that have expanded their activities to include renewable energy.

More than 700.000 including crowdfunding experts, different types of renewable energy developers and professionals, NGOs, environmental organisations, policy makers and the wider public have been reached through the projects dissemination activities. 1.200.000 accounts potentially reached through the #CrowdFundRES twitter discussion group.

This work has improved understanding of how crowdfunding is used for financing renewable energy projects and has 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.
Increasing the share of renewable electricity will be among the main impacts of the CrowdFundRES project. The direct outcome of the project is the development of RES projects that have entirely or partly covered part of their needs for financing through crowdfunding. CrowdFundRES project has gained practical experience by analysing 18 crowdfunding renewable electricity projects that has been used as input to the development of targeted guidelines and policy recommendations. As a direct outcome of the 18 projects, there is around 110MW of additional installed capacity. As an indicator of energy savings and C02 reduction, one energy efficiency (CHP) crowdfunded project made possible to reach a total energy savings of 37%, leading to an approximate of 270 CO2 tons savings each year. Overall, through these projects around EUR 29,5 Mio has been successfully crowdfunded. 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.

In terms of socio economic impact, another main advantage of Crowdfunding is that it can be a very useful tool in building public support for RES projects. It offers the local community the possibility to participate in renewable energy projects developed in their area. The local population is of course the first to be targeted during the crowdfunding campaign. The initial reaction to the crowdfunding campaign provides the developer with an indication about the levels of acceptability the project has in the locality, also depending on the details of the investment opportunity and the local socio-economic profile. So, in a sense crowdfunding operates as a filter, giving the power to the local communities to make choices and support the type of projects that they prefer to see developed in their area.
If the citizens are involved with renewable energy development through crowdfunding, it is easier for them to accept infrastructure in their areas as long as it is clear that this infrastructure is a necessary enabler for renewable energy projects. The sense of ownership and benefits sharing that crowdfunding brings, even if that is a small percentage of the development for each individual, is a very strong tool to shift the mood of the local community. In the experience of the consortium, the interest of developers in crowdfunding is triggered by the fact that it can help with reducing public opposition as much as it is by the attractive terms of project financing. The reduced time in the authorisation process, also results in lower requirements for resources and thus lower transaction costs, both for the project developers as well as for the permitting authorities.