Photo: www.dieterjuedt.com (link)
Moves to relax rules on equity crowdfunding in the US look set to further increase the finance options available to PV start-ups and project developers. In June, the US Securities and Exchange Commission made it possible for non-accredited investors to take equity stakes in crowdfunded ventures. Previously only people earning USD$200,000 a year, or with a net worth of at least $1 million, had been able to pursue equity crowdfunding. This is different to the social crowdfunding model popularised by companies such as Kickstarter and Indiegogo.
Both types, however, are growing in importance as a means of funding. Overall, the crowdfunding industry is expected to raise around $34.4 billion in 2015, up from $16.2 billion in 2014. The popularity of this method of funding is underscored by the number of platforms available, with at least 1250 being active in 2015. This could potentially make it difficult for solar companies to choose one most appropriate for their needs, although in practice the choice can be narrowed according to the precise type of support required.
For equity-based crowdfunding there are platforms such as Fundable, which for example start-up Rayton Solar is using to raise $1.2 million for solar panels that it says will be 62% cheaper and 25% more efficient than the current industry standard. Other large equity platforms include CircleUP and MicroVentures.
Many solar entrepreneurs, however, start out on pledge-based crowdfunding sites such as Kickstarter, Indiegogo and GoFundMe. Indiegogo is notable for having hosted PV’s only entry into the top 50 crowdfunding campaigns of all time, for Solar Roadways. Kickstarter is perhaps the best-known pledge-based site, although its focus on creative industries somewhat limits its usefulness to the solar industry.
A further category of interest to the solar industry is loan-based crowdfunding, represented by websites such as Kiva. This category is particularly useful for small-scale solar projects, for instance in developing countries. One example is the non-profit organisation EarthSpark International, which has pulled in more than $187,000 in loans on Kiva to develop solar lighting in Haiti. “In total, Kiva's lenders have crowdfunded more than 10,000 green loans, which include everything from clean burning cook stoves to solar energy products,” said Jason Riggs, director of communications and media alliances at Kiva.
In addition to these broad categories there is a growing trend for crowdfunding platforms focused on renewable energy, such as Abundance Generation, Mosaic, Trillion Fund and GenCommunity. The advantage of these is that their models are particularly suited to solar projects. And even though they may have a more limited reach than some of the wider crowdsourcing platforms, the amounts of money they have been able to raise are still considerable. The Trillion Fund, for example, raised GBP£2.5 million (almost $3.9 million) in the 10 months to March 2015. “The are good to know because they can market your project,” said Guy Auger, chief executive of the renewable energy asset management firm Greensolver.
The Renewable Energy Crowdfunding Conference is the annual meeting where project developers, investors, financiers and crowdfunding platforms connect and go in-depth on maturing democratic financing as a viable alternative to traditional renewable energy project financing. For more information: firstname.lastname@example.org