Beyond profits: Why crowdfunding is ideally suited for Renewable Energy projects

Julkaistu: 24.10.2014

Joukon Voima is a freshly founded company located in Finland. We direct funds from small-scale investors to solar and wind energy projects and pay our investors “dividends” according to the generated savings and revenue. To improve the profitability of our projects, we require some on-site consumption, on the other side, we will have property and land owners as project partners. Ideally, all of the produced energy would be consumed on-site.

When it comes to start-up companies it’s fascinating to ponder the trail which led to founding the companies. It’s actually more intriguing than what the companies do. Answering to the question what we do is fairly straight forward.

Obviously and shamelessly, one of our goals is to do this for a living in the near future. But there’s more than that behind the business idea. Why crowdfunding of renewable energy projects? Both of the key concepts hold plenty in them.

In our case, renewable energy was there first. Frustration towards the current electricity market situation in Finland got us to think of ways how to advance the adoption of renewable energy solutions. Despite the well-known benefits it’s still rare to see solar panels or wind turbines on Finnish soil. What is more, according to a recent study 9 out of 10 Finns would like to see more domestic solar and wind power (Finnish Energy Industries, 2014). Unfortunately, the means to contribute to their development are limited. Just like the 9 out of 10, we want to support the cause, and ended up seeking for an indirect approach.

This indirect approach is crowdfunding, the emerging form of funding that relies on engaging a large audience of like-minded people. We soon learned that crowdfunding isn’t merely a financial mechanism, but an ideology. There are various nuances in the mechanism that keep us fascinated and driving our business development.

Bottom-up

In bigger investments, crowdfunding enables private people to vote with their wallet and decide what’s built, developed and implemented. According to studies, private people are more willing to make risky and unconventional investments compared to finance institutions. The breakthrough of renewable energy in Denmark in the 80’s is a great example of how ordinary people can ignite the spark to a greater adoption. As private people are more driven by cause behind the investment, even if profit remains the number one driver to crowdfund, the cause subsidies the apparent risk.

Increasing awareness

Crowdfunding is a high-committing form of funding and therefore is able to deliver broader meanings to the active individual. Just as someone buying solar panels begins to observe their electricity consumption from different perspective, crowdfunders of renewable energy solutions will most likely become increasingly aware of energy issues. With smart yet determined marketing, crowdfunding can become engaging mechanism to improve energy awareness among the public. By exploiting crowdfunding in the energy industry we can advance towards the future vision where electricity is not regarded as some infinite, abstract substance that pours out of the wall socket.

Building communities

Crowdfunding can unite people like no other form of funding. This is because, unlike traditional financial instruments, it rallies active and like-minded people together for a well-defined, explicit cause. To utilize this synergy, Joukon Voima’s goal is not only to build physical constructs, but communities. These communities could function as seeds that gradually grow outward, attracting new people and leading to new projects. Slowly, with the help of these growing energy communities, we can renew the landscape of consumer energy production. We believe that sense of community is the reason for people to engage with the service time after another. No other financial mechanism can provide such opportunity.

In summary, crowdfunding is truly an exceptional concept. I perceive it to provide means to form the future that we are not yet aware of. The versatility of applications is intriguing. Let’s stay innovative and open minded in developing the concept further and we might end up somewhere extraordinary.

Behalf of Joukon Voima,
Jukka Kajan
CEO