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

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(30 Nov 2015, 40 platforms & 132 developers)

www.crowdfundres.eu

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%

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(30 Nov 2015, 478 respondents)

www.crowdfundres.eu

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