Alternative investments

Money from the masses

Lothar Lochmaier, 22 May 13
Crowdfunding platforms, where individuals finance good ideas online, are 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 to 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.

This is an abridged version of the interview – the full text is available in new energy issue 03/2013

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