crowdfunding: a new form of participatory financing for...
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This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No
646435. The sole responsibility for the content of this report lies with the authors. It does not necessarily reflect the opinion of the European
Union. Neither INEA nor the European Commission are responsible for any use that may be made of the information contained therein.
Crowdfunding: A new form of participatory financing for renewable energy projects*
PWEA 2016 Conference & Exhibition | 9 March 2016 | Warsaw, Poland
Thomas Maidonis | WIP Renewable Energies
* Contributions: S. Betz (WIP Renewable Energies); K. Kohl (ECN); A. Bergmann, B. Burton, M. Klaes (University of Dundee); T. Aschenbeck-Florange, T. Drefke (Osborne Clarke), K. Harder (Abundance), A. Raguet (Lumo)
Definition of Crowdfunding
“… a collective effort of many individuals who network and pool their resources to support efforts initiated by other people or organizations. This is usually done via or with the help of the Internet. Individual projects and businesses are financed with
small contributions from a large number of individuals...”
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Source: K. De Buysere, O. Gajda, R. Kleverlaan, D. Marom, “A Framework for European Crowdfunding”
www.crowdfundres.eu
Crowdfunding for Renewable Energy
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The part of the public that has an interest in investing even very small amounts of their savings in renewable energy projects
www.crowdfundres.eu
Crowdfunding for Renewable Energy
4
Community members
Other citizens
www.crowdfundres.eu
Crowdfunding for Renewable Energy
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intermediaries facilitating the financial transaction between the public and the
project developers
www.crowdfundres.eu
Crowdfunding for Renewable Energy
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Renewable energy project developers whose access to financing is getting
more challenging
www.crowdfundres.eu
Crowdfunding for Renewable Energy
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Commercial developers
Cooperatives
ESCOs
Public entities + PPPs
www.crowdfundres.eu
Case study: Crowdfunding for a cooperative developing a Wind Farm
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• Upper Pitforthie Windgen
• Location: Stonehaven, Aberdeenshire, UK
• Investment duration: 1 year
• Installed capacity: 500 kW
• Project under construction
• Amount raised: £2,175,000 from 418 investors - IRR: 12%
www.crowdfundres.eu
Case study: Crowdfunding for a cooperative developing a Wind Farm
Case study: Crowdfunding for a commercial developer developing a Wind Farm
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• Parc éolien des Brandes
• Campaign launched in 1-2 weeks
• Location: Saint-Secondin (near Poitiers)
• Installed capacity: 15 MW = 35 GWh/a
• Electricity to power 13.000 households
• Budget: € 25.500.000
• Target: € 500.000 - Up to € 25.000 / citizen
www.crowdfundres.eu
Case study: Crowdfunding for a commercial developer developing a Wind Farm
Case study: Crowdfunding for buying an existing wind project
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Case study: Crowdfunding for buying an existing wind project
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• Bought from energy companies, financial institutions and project developers
• Crowdfunding record
• Raised €1.3 Million in just 13 hours
• Sold 6,648 shares of €200 to 1700 Dutch households
• Each share corresponds to 500kWh per year
www.crowdfundres.eu
Aim: Contribute to the acceleration of the renewable energy growth in Europe by unleashing the potential of crowdfunding for financing renewable energy projects.
Objectives:
• Deepen understanding of adoption of crowdfunding for financing renewable energy projects
• Analyse the challenges faced by the application of crowdfunding for renewable energy projects in Europe
• Develop and apply guidelines that support more effective practices
• Help improve the market and regulatory framework in Europe
• Promote the crowdfunding concept and its advantages among those who could contribute or raise funds
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Case studies Review and Update of Crowdfunding Regulation & Market Developments
EU wide survey for contributors, platforms &
developers
Developers: Organisation structure
16 www.crowdfundres.eu
56%
12%
9%
5%
18% Comercial developers
Cooperatives
ESCOs
Public entities
Other
RES technologies
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Valid responses: 66 / 132 developers & 15 / 40 platforms; multiple answers possible
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Developers
Platforms
RES project size
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Valid responses: 66 / 132 developers & 15 / 40 platforms; multiple answers possible
0%
10%
20%
30%
40%
50%
60%
Developers
Platforms
Developers: Familiarity with crowdfunding
0
19%
62%
19%
What is crowdfunding? (No knowledge)
I’ve heard about it, but what does it have to do with RES project financing?
I know crowdfunding, but I have never usedit for financing any part of a RES project.
I know crowdfunding and I have used it forfinancing at least a part of a RES project.
19 www.crowdfundres.eu
Developers: Traditional financing vs. Crowdfunding
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Very easy
Easy
Neither easynor difficult
Difficult
Very difficultBank loans
Support programs
Crowdfunding
How difficult did you find the process?
www.crowdfundres.eu
Developers: Traditional financing vs. Crowdfunding
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How long did the overall process take?
0%
10%
20%
30%
40%
50%
60%
Bank loans
Support programs
Crowdfunding
www.crowdfundres.eu
Developers: Crowdfunding experience
Most of the project developers had positive experience:
• It reduced local public opposition of the project
• It made financing easier or faster
• It was cheaper than traditional financing
• It was more expensive than traditional financing
• No delays on the implementation of the project because of it
• No impact on the permitting process
22 www.crowdfundres.eu
Developers: Future intentions
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Would you consider using crowdfunding for financing your project (again) in the future?
www.crowdfundres.eu
50%
38%
6% 3% 3%
Public: RES CF Experience
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• 389 useable responses of which
• 330 (85%) familiar with crowdfunding of which
• 149 (38%) had invested via crowdfunding of which
• 75 (19%) had invested in RES via crowdfunding
www.crowdfundres.eu
Most recent RES crowdfunding investment (€)
Nr. Of respondents
< 100 6
100 - 500 27
500 - 1000 14
1000 - 5000 19
5000 - 10000 4
10000 - 25000 2
25000 - 50000 1
>50000 0
Public: Future intentions
Plan to invest in RES via crowdfunding in next 3 years: Yes: 39% Maybe: 53% No: 8%
Of those who have already invested via crowdfunding:
Yes: 61% Maybe: 34% No: 5%
Of those who have already invested in RES via crowdfunding:
Yes: 82% Maybe: 13% No: 4%
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i.e. familiarity linked with positive attitude
www.crowdfundres.eu
Public: Decision factors
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Factors taken into account in RES investment decisions amongst those planning to invest in CFRES in next 3 years:
Transparency 79%
Expected rate of return 66%
Sustainability impact 62%
Investment model 61%
Technology type 56%
Developer reputation 47%
Geographic location 41%
Time frame (duration) 36%
Info. in native language 33%
A project in development 23%
Existing operational project 17%
Cross-border investment 10%
Review of Crowdfunding Regulation & Market Developments
28 www.crowdfundres.eu
Crowdfunding regulation in the EU
RES crowdfunding is more developed in Western Europe
8 of 28 EU MS have implemented a specific crowdfunding regulation → Austria, Belgium, France, Germany, Italy, Portugal, Spain, UK
• 5 of these 8 MS have a "Crowdfunding exception" from regular regulation
• in the UK the specific crowdfunding regulation applies in addition to the regular regulation
Also the Eastern EU MS have taken or plan steps to implement specific crowdfunding regulation
Most MS without specific crowdfunding regulation apply regular financial services regulation → Crowdfunding often does not fit properly into persisting regulatory regimes
29 www.crowdfundres.eu
Crowdfunding regulation in the EU
Thresholds for exception from prospectus requirement very diverse throughout EU, e.g.:
• 100.000 € in Greece
• 300.000 € in Belgium
• 1.000.000 € in France
• 2.500.000 € in Germany/the Netherlands
• 5.000.000 € in Italy/UK
Scope of exception from prospectus requirement also very diverse in EU, e.g.:
• Italy: only applicable to particular equity investments
• France/Belgium: only applies to specific equity and lending instruments
• Germany: limited to specific lending instruments
30 www.crowdfundres.eu
Crowdfunding regulation in Poland
31 www.crowdfundres.eu
Commercial project developers rather establishing their own crowdfunding platform than using an existing one
Crowdfunding sometimes compared to public collections (Public Collections Act of 2014)
Nonetheless, crowdfunding is not subject to the regulations stemming from the PCA
27 March 2014: Previous Polish government’s position:
• currently no need for binding legal regulations as crowdfunding in Poland is still in its early stage of development
• need for continued monitoring, in particular for investment crowdfunding
New government since Q3 2015 no official position on crowdfunding, so far
October 2015: Coalition for Polish Innovation ‘s draft bill --> amends several items of legislation in order to facilitate crowdfunding by introducing exemptions
Based on the collected input we will:
• Organize a workshop in Brussels (24 May 2016) where those who give feedback of good quality will be invited to participate
• Develop and apply guidelines for platforms and project developers
• Develop policy recommendations which will be discussed with European and national decision makers and regulators
32 www.crowdfundres.eu
Get involved: Visit www.crowdfundres.eu and
take the survey: http://www.crowdfundres.eu/take-the-survey
We can help:
We can get you in touch with a crowdfunding platform matched to your profile and plans, to help launch and
finance your project:
Send “support” to info@crowdfundres.eu
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Thomas Maidonis
WIP Renewable Energies
Sylvensteinstr. 2, 81369 Munich, Germany
Phone: +49 89 720 12 720
Email: thomas.maidonis@wip-munich.de
www.wip-munich.de
Join our Crowdfunding for Renewable
Energy Group on LinkedIn
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