New investors

Money from the masses

Lothar Lochmaier, 4 Apr 13
Crowdfunding platforms, where individuals finance good ideas online, are now helping to get green projects off the ground. Several of the sites recently launched in Germany specialise in renewables.

In the future, banks and traditional investors will no longer be the only ones funding bright, green ideas. Environmental projects will also be able drum up support in cyberspace – provided the online community feels that they are a promising, trustworthy and attractive investment. This new approach to financing is called crowdfunding. It basically involves a crowd of users coming together to fund good ideas through loans or other forms of finance, in the hope of getting a return on their investment.

A July 2012 report by the energy sector analyst Bloomberg New Energy Finance (Extraordinary popular solution: funding from crowds?) says that, with environmental crowdfunding now offering average returns of between five and nine percent, the financial sector cannot afford to overlook this new market segment. The platforms that pioneered the crowdfunding concept include Abundance Generation in the UK and Solar Mosaic in the US. The former, which is regulated by the Financial Services Authority, allows individuals to invest small amounts in wind and solar projects. Returns over a 20-year period currently stand at six to eight percent.

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Crowdfunding sites are now starting to emerge in Germany. At this year’s CeBIT computer show in Hanover, the organisers joined forces with crowdfunder Seedmatch to award a prize to two renewables projects. The awards were part of Code_n, a forum for young entrepreneurs, and one of the winners was Berlin-based start-up changers.com. Crowdfunding for the newcomers was launched live during CeBIT.

Changers.com was developed by Blacksquared GmbH and is the first online marketplace for private emissions trading in the US and Europe. It is based on the idea of individuals using portable solar panels to generate and store their own energy. The devices measure how much energy is produced, calculate the CO2 savings and then share the data with the changers.com community. Users are rewarded with credits that they can exchange for products featured on the site. The people behind changers.com hope that their approach, which is a more light-hearted take on the usual dire warnings, will help to change the way we think about and use energy. Markus Schulz, founder and managing director of Blacksquared, thinks that crowdfunding is the perfect match for the changers.com concept: “Our site is all about people chipping in to help reduce carbon emissions. Once you get a big community together, that’s when the whole thing develops enough momentum to really change the way we think.”

This is an abridged version of the article – the complete text is available in issue 3/2013 of new energy.

 

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