For the second consecutive year SolarPlaza had gathered members of renewable energy crowdfunding industry in London. Being a new and fresh industry, significant developments and leaps forward happen incredibly quickly. The top subjects, coming up various times during the conference day, were a lot different than only a year ago. These are the three takeaways from the RE Crowdfunding Conference 2015:
There’s no lack of investment, but a lack of quality projects
It became very obvious that for many platforms, the greatest challenge for upscaling operations is the difficulty of providing projects to actually be crowdfunded.
During the day I heard no one complaining that they are struggling to get investment in from crowdfunders. However, there was a lot of discussion, both on stage and during breaks, on how to clinch deals, how to find quality projects, how to take potential leads from the very beginning of the deal pipeline to become actual projects etc?
The average investment size in crowdfunded renewable energy projects seems to surprise one after another. Trine’s COO Andreas Lehner expressed his amazement that their first project had attracted investments of several thousand euros. Trillion Fund’s Julia Groves, meanwhile, stated that for them the average size of an investment made by an individual crowdfunder is above £4000.
Even though it was me who stated on the stage that crowdfunding is a community business, it seems that a very crucial part of the process takes place way before the crowd is even found.
Could I get involved? – The legal hurdles for cross border crowdfunding
The line that the facilitator, SolarPlaza’s Edwin Koot, kept on repeating the most was ”Can I get involved in the projects on your platform?”. Platforms all across the world have interesting projects ongoing and surely there are interested investors screening opportunities regardless of their nationality and location. The most common answer to Mr. Koot’s question ”Well…uhm…in the future, yes,” accompanied by uneasy wriggling in their seats.
A harmonized legal framework across countries is the solution that everyone is looking for. Eversheds’ Matthijs Bolkenstein ended his review on EU level legislation by saying that, ”I hope we’re half way through the journey”. Someone dared to ask when will the harmonization be done then. “Maybe in three years”, Bolkenstein speculated.
Before the framework is harmonized, I presume that platforms will customize their legal documents to apply to new countries one by one and consequently arrange bilateral cooperation with national platforms.
Kudos also to Citizenergy with their mission to build a pan-european platform for crowdfunding renewables!
Reaching for the Triple Bottomline
Crowdfunding renewables provides a great chance to tackle the triple bottomline: financial, environmental and social benefits. During the day we heard examples from emerging markets and local neighborhoods.
To me the most inspiring speech of the day was held by Paul Camp representing Big60Million. Their project provides some great examples on how to involve the locals and create local ecosystems. For example, the solar park that Big60Million funded in Atherstone is not just about generating renewable energy. It is a bee farm with enormous wildflower beds protecting biodiversity, study field for the local kids and much more.It is evident that projects where the benefits remain in the local community tend to gain great support. Based on their experience, Camp expressed this natural tendency well:”People care more about what’s in it for me than some other concerns”.
German-based Ecoligo and the Swedish Trine are focusing their operations on developing countries. Ecoligo seeks to have their first campaign opened in the first half of 2016. While the conference was underway, Trine members were at the same time dealing with their pre-launch stage for a solar project in Kenya.
The two companies are fighting energy poverty by providing electricity to locations where it is a scarcity. Solar systems will replace polluting diesel generators and make lighting solutions hazardous for health unnecessary. The social benefits, in particular, can be enormous. The radiation levels make sure that the potential financial benefits of solar systems in Africa is well above the figures that we’re used to in Northern Europe.
The triple bottomline gathered much more attention than last year, which is well justified to say the least. Even though the broader set of benefits is such an essential part of our business, I dare to say, it is not emphasized enough in our own talks, neither in our marketing communications.