2012-08-28

Become A Renewable Energy Magnate, With The Cash In Your Wallet

Bullish on renewable energy but short the few million to invest in a new solar power plant? Perhaps you have $8.

It can be hard to truly connect with the renewable energy revolution. Just buying wind power from your local utility is very far removed from, say, having your own solar panels, and not very many people are doing solar installations yet. But what if you could own a part of a solar power plant, at prices that almost anyone could afford?

Abundance Generation, a UK company, has turned to crowd funding to finance major renewable generation projects. "We wanted to create productive, tangible and long-term investment opportunities that are open to everyone," says the company on its website. "Renewable energy is a great place to begin the process of returning control to people over where their money goes and how it is invested."

Once a project is up and running selling electricity, in part thanks to your money (as little as five British pounds), investors will receive cash payments based on the value of the energy sold by the project. Abundance estimates small-time investors will earn 5.7 to 8 percent of the project’s profits over 25 years. Invests are treated as debt instruments (debentures), rather than equity, skirting the issues that have held up crowd funded VC in other contexts (although the JOBS Act should be changing that soon).

The company is raising as much as $3.2 million to install solar panels on homes on a UK project in the South Downs region and has already secure hundreds of thousands of dollars for other projects.

But that’s just a tiny drop in the bucket of the $500 million Bloomberg’s New Energy Finance reports have been raised through crowdfunding thus far—-and even less that the many billions needed for renewable energy generation. To support a "large, robust, and transparent investment mechanism" for crowdfunding, Bloomberg says insurance products and a secondary market are needed. Neither are in place at the moment, at least not at scale.

Once they are, Abundance Generation may be on the cusp of something larger, what it calls "democratic finance." Despite delays with its first project (a wind farm suffering unrelated supply chain issues), the company is preparing to offer investments in wind, solar, hydro and anaerobic digestion technologies soon.

Founder Karl Harder says that their approach "will give back to people control over where their money is invested and how it generates a return" in the The Guardian. Renewable energy as just the beginning. "We believe that democratic finance could be a more sustainable source of finance for other forms of public infrastructure investment such as schools, hospitals and social impact initiatives," he says.

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  • Dennis Baker

    The solution to climate change

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    Dennis Baker
    106-998 Creston Avenue
    Penticton BC V2A1P9
    cell phone 250-462-3796
    Phone / Fax 778-476-2633