Crowdfunding for renewable energy is an innovative financing mechanisms that enables individuals to invest into projects in form of loan or equity. Alternatively platforms can be used just to provide donations. This presentations presents several case studies (Pfaffenhofen Energy Cooperative, Enerfip, Bettervest and Sun Exchange) and it compares them models. Conclusions about the model with highest people empowerment, financial inclusion and scalability potential are given.

1. Power to the people:
crowdfunding renewable
energy projects
Mak Đukan, Starfish Energy
CEO & Co-founder
mak@starfishenergy.org
www.starfishenergy.org

2. Source: Own image
ABOUT STARFISH
• Based in Zagreb and Berlin
• Focused on the energy transition in Southeast Europe
• Main areas of expertise:
• renewable energy policy analysis
• innovative business models for renewables
• long term decarbonisation strategies
• capacity building
• Private consultancy projects and EU funded research

3. Source: Own image
ABOUT ME and my crowdfunding resume
• Renewable energy cooperatives project (2013), UNDP, Croatia
• Crowdfunding for renewable energy project (2013), UNDP, Croatia
• Sustainable Energy Youth Network (2015), Croatia and Greece
• Crowdfunding Academy (2015), UNDP, Global
• CROWDFUNDRES (2016) and CrowdfundPort (2016)*, EU
*brief involvment

4. WHY CROWDFUNDING?
Source: Kickstarter
Supporting projects that would
otherwise not get funding

5. WHY CROWDFUNDING?
• NO INTERMEDIARY BETWEEN PROJECT AND
FUNDING
• NO BANKS, NO DEVELOPMENT ORGANISATIONS,
NO INSTITUTIONS
• JUST AN IDEA!

6. Why not use it for
renewable energy?

8. Source: Econbrowser

9. RESEARCH OBJECTIVES
• What crowdfunding model has the greatest potential
in terms of people empowerment?
• Which of the studied models has the greatest potential
for resource mobilisation?

10. • Case study analysis
• Stakeholder interviews (between April and July 2018)
๏ Energy cooperative Pfaffenhofen, Germany
๏ Zelena Energetska Zadruga (ZEZ), Croatia
๏ Enerfip, France
๏ Sun Exchange, South Africa
๏ Bettervest, Germany
METHODS

11. Source: https://www.metropolregion-muenchen.eu/
Energy cooperative
Pfaffenhofen
Germany, Bavaria

12. ABOUT PFAFFENHOFEN
• 50 km north of Munich
• Institutional structure supporting local Energiewende
• Stadtwerke Pfaffenhofen, Energie- und Solarverein,
Bürgerenergie Pfaffenhofen (energy coop)
• Aim to become 100% renewable by 2021 (70% in 2016)

13. Source: Energie und Solarverein Pfaffenhofen e.V
ENERGY COOPERATIVE PFAFFENHOFEN
leading the energy system transformation

14. • Members: a) citizens registered in Pfaffenhofen b) the
municipality c) local companies including Stadtwerke
Pfaffenhofen
• Members buy shares in the coop (100 EUR per share) and
can own up to 50 (max 5.000 EUR)
• Each member has equal voting rights regardless of the %
of share ownership (main coop principles)
COOP DESCRIPTION

15. Source: Andreas Herschman, Energy Cooperative Pfaffenhofen
Project example: Wind
power plant Laustholz

16. Main characteristics
• 3 MW, Enercon 115
• 5.5 million EUR
• 3% return for investors
• 20 years
Financing structure (GmbH % Co.KG)
• 9% Enercon
• 34% Citizen loans
• 57% Bank loan
PROJECT EXAMPLE

17. Coop membership fee
- 100 EUR per share
- maximum 50 shares
1
Project development
- membership fee used
- 100.000 EUR needed
2
Coop members finance equity
- 1000 EUR minimum loan
- receive 3% over 20 years
- extra profits distributed to citizens
- 25% of principal repaid every 5 y
3
Bank debt financing
- typical interest rate for wind park 2.5%
- an SPV is set up for the project
4
Return of coop funds
- Funds used for project
development returned to coop
5
FINANCING MODEL

18. • Develop renewable energy resources in ownership of local
citizens
• Against the north-south grid highways
• Do not want big companies owning the wind farms and
solar parks in their district
MAIN MOTIVATIONS

19. Source: Zbynek Burival, Unsplash
Enerfip
France

20. CROWDFUNDING PLATFORM: larger
choice of projects
Professional Project
developers initiate project
Can choose between bonds,
minibonds and shares

21. Main characteristics
offered in form of minibonds > 100.000 EUR
total project value > about 26 million EUR
project size > 22 MW
interest rate > between 4 to 6%
loan duration > 3 years
Project structure
project initiator > Valorem (installed about 1 GW of RES)
rounds of offerings
1) citizens of host communities and Valorem employees > 6% return
2) citizens of neighbour communities > 5% return
3) everyone else > 4%
project used to increase local acceptance, no collective governance
PROJECT EXAMPLE: Bois Chardon
Wind Power Plant
MINIBOND PROJECT

22. Main characteristics
offered in form of shares > 865.000 EUR
total project value > about 14 million EUR
project size > 12 MW
dividend return > between 5 to 7%
Project structure
project operating since 2010
LAD-SELA a development agency that invested initially in the project
after 5 years they decided to sell their shares to citizens
new owner of their share Société Citoyenne Vincentaise
PROJECT EXAMPLE: Le Renardière
Wind Power Plant
SHARE OFFERING

23. PROJECT EXAMPLE: Le Renardière
Wind Power Plant
Project structure before and after

24. • Increase local acceptance of RES projects
• Marketing for project developers
• Citizens included in ownership in certain cases but mainly
not > offered financial participation
• Hybrid model between pure commercial development and
citizen governance and financial inclusion
MAIN MOTIVATIONS

25. Bettervest
Developing countries
Source: Afrika Portal

26. CROWDFUNDING PLATFORM for
projects in the developing world
Subordinated loans

27. Source: Bettervest
PROJECT EXAMPLE: Solar energy for
rural electrification in Namibia

28. PROJECT EXAMPLE: Solar energy for
rural electrification in Namibia
Main characteristics
subordinated loans > 209.400 EUR for 2160 solar home systems
interest rate > 6.25% for five years
Project structure
project initiator > Olusheno Sales & Distribution Ltd.
sells solar home systems through network of agents
this their fourth financing round through Bettervest (overall raised
600.000 EUR) > used funds to expand network and reach more
homes

29. BETTERVEST model
• Subordinated loans > last in line in case of insolvency
• Only Germans can invest > they have adopted the platform
only to fit with German law
• Most of projects (80%) based on corporate financing > an
existing company hosts the project.
• Others based on forming an SPV
• Focus on developing countries because of a market gap >
banks will not lend money to small projects

30. Source: Tech Crunch
Sun Exchange
Blockchain based micro-financing of PV projects
South Africa (with global aspiration)

31. CROWDFUNDING PLATFORM but
with blockchain based payments
Sale of cells in solar PV
projects

32. Main characteristics
project size > 18 kW
estimated IRR > 10%
lease term > 20 years
Project structure
solar PV plant leased to South South North, an NGO that works on climate
change mitigation (offtaker)
Sun Exchange sells electricity to the offtaker for approximately 10% less
than the market electricity price
IRR projection based on the savings that the offtaker will achieve
PROJECT EXAMPLE: South South
North Solar PV

33. Investors buy solar PV cells
- besides BTC they can use bank transfer
(in local currency) and credit card
- BTC payments fixed or variable (final
PV cell/BTC amount determined when
the crowdsale ends)
1
Solar cell owners lease agreement
signed (if funding successful)
- 20 years, monthly payment
- lease price set to be about 10% less than
electricity price
2
Sun Exchange leases the plant
to offtaker
- offtaker pays the lease to Sun
Exchange
3
FINANCING MODEL
4
Investors receive monthly
payments
- can choose to have payment converted
from local currency to BTC immediately
- can sell BTC for EUR, USD etc. on
cryptocurrency exchange

34. ADVANTAGE
• anyone can participate
• bitcoin can be purchased from
any currency
• small barriers of entry (can
invest from 5 EUR)
• small transaction costs
• high security and transparency
of payment
DISADVANTAGE
• extreme bitcoin price volatility
• local currency risk
• unpredictable cash flow >
obstacle for large scale
investors
THE ADVANTAGES AND
DISADVANTAGES OF TRANSACTING IN
BITCOIN

35. 1. Collective governance - citizens participate directly in
decision making of individual projects*
2. Financial participation - citizens directly own renewable
energy projects and profit from them*
3. Scalability - potential to raise capital and increase
renewable energy capacity
4. Transferability - potential to be transferred in various
settings such as developing countries
“POWER TO THE PEOPLE” and
the energy transition
*Source: Rüdinger A., 2016

36. 1. Collective governance - citizens participate directly in
decision making of individual projects*
2. Financial participation - citizens directly own local renewable
energy projects and profit from them*
3. Scalability - potential to raise capital and increase renewable
energy capacity worldwide
4. Usability - ease of use in terms of legal and technical setup
5. Proof of concept - does it work? Has it been applied multiple
times?
“POWER TO THE PEOPLE” and
the energy transition
*Source: Rüdinger A., 2016

37. Collective governance
Financial participation
Scalability
Pfaffenhofen
Energy Coop
Enerfip
Sun
Exchange
High Moderate Low
High LowModerate
Low High
Usability ModerateModerateLow
Bettervest
Low
Low
Moderate Moderate
Moderate
Proof of concept High High High Low

38. MODEL COMPARISON

39. MAIN CONCLUSIONS
What model has the greatest potential in terms of people
empowerment?
• Energy cooperatives that locally engage citizens have the greatest
empowerment potential
• However such models do not have the biggest resource mobilisation
potential (globally)
• This is especially the case for developing countries, where a legal
framework and policies for coop creation would need to exist
• Foremost a strong middle class is needed to make such organisations
successful > German Mittelstand vs. African middle class

40. MAIN CONCLUSIONS
Which of the studied models has the greatest potential for
resource mobilisation?
• Online platforms have by far the largest potential, and especially when it
comes to wider citizen participation
• However models like energy coop’s also have a very large resource
mobilisation potential but on local level
• Enerfip collected 11 million EUR, while coop in Pfaff. about 7 million EUR!!
• Sun Exchange possibly largest potential but model yet to be proven > BTC
transactions enable cross border transactions
• Platforms like Enerfip and Bettervest mainly limited to nationals of France
and Germany

41. Thank you for
your attention!
Mak Đukan
mak@starfishenergy.org
www.starfishenergy.org