Energy communities, characterized by organising collective and citizen-driven energy actions are becoming increasingly important when it comes to accelerating green energy and the energy transition. This is largely due to a growing public attention for climate change and the way energy is produced. Another key factor for the development of these is the continuously decreasing prices of renewable energy sources and especially the impact they create locally, which also makes this sector much more attractive to citizens.

Among the main advantages of the energy communities, it is worth highlighting that they provide proximity and democratised energy. As they are close to the territory where the energy is going to be consumed, they know more precisely the energy demand of consumers, thus lowering production costs and reducing the loss of efficiency when transporting energy from large production plants.

In addition, these characteristics provide important economic and social benefits to the territories where they are implemented, as they help to stimulate local activity, generate employment and fix population in municipalities with demographic challenges. Despite this, energy communities often encounter major barriers when looking for finance or accessing traditional financial markets.

When talking about communities, it's maybe worth to raise attention to alternative financing possibilities for them. In recent years, crowdfunding has established itself as an important tool for financing projects through a collective of people. Therefore, in the case of financing energy communities, crowdfunding can play a relevant role in the development and creation of these communities. Thanks to crowdfunding, all citizens can participate in the energy transition.

Currently, there are many platforms dedicated to financing renewable energy production through crowdfunding, for example, Lumo in France or One Planet Crowd in the Netherlands. Some of them are also incorporating the financing of energy communities into their business model.

In the following, we present three different examples where energy communities have been successfully financed through different crowdfunding modalities.

Crowdfunding financing for the installation of solar panels in a homeowners' association in Barcelona

This project has been financed through the lending-based crowdfunding platform Ecrowd! in Spain, which is specialised in financing investment projects with a social impact. The platform provides numerous investments in renewable energy projects, but is also incorporating projects for financing energy communities.

This project has managed to raise €37,100 through 107 investors.

The shared self-consumption photovoltaic installation will provide energy for the common services and will be associated with 60 homes in the building. It is expected to produce 38,280 KWh per year, representing an estimated saving of €2520 per year for the community and a reduction in emissions of 4Tm/year.

This investment will also be directly supported by grants from Barcelona City Council.

Photovoltaic installation for shared self-consumption in Albalat (Valencia)

This project is managed by the Valencian energy cooperative Sapiens Energía, which is promoting the generation of energy communities across the Valencian Community. The beneficiaries of this energy community will not simply be the inhabitants of Albalat who decide to participate in it. Thanks to the launch of the crowdfunding campaign, private investors who are not in the town but who want to participate in the initiative and therefore obtain an economic interest rate, will also be able to participate.

Despite not having achieved 100% of the funding through crowdfunding, as only €54,400 has been obtained from the targeted €80,000. Nevertheless, 68% of the investment was secured through 20 investors and the project could be initiated and delivered.

As it is a Crowdfunding lending modality, investors will have an annual interest rate of 3.5% over 4 years.

This project has also been supported by grants from the Valencian Institute for Business Competitiveness (IVACE), through its plan to promote electricity self-consumption in local energy communities.

It is estimated that approximately 200 people benefit from this initiative, providing a family saving of €130 per year and €10,320 per year if all beneficiaries are considered. This project also aims to reduce the energy bills of 6 families living in energy poverty in the locality.

CéléWatt, a Solar Park on Trees

This project consists of a local energy community in Carayac, France. The governance of the solar park is community-based and citizen-led, combining crowdfunding with cooperative management. The launch and creation of the community solar park was managed by a group of a dozen volunteers living in the area who became administrators of the CéléWatt cooperative. The project was totally financed through a crowdfunding campaign raising €237,000.

The main objective of this campaign is to achieve cleaner energy consumption for the inhabitants of the village, but it should also be noted that one of the main challenges in the region is local employment - therefore, the vast majority of materials needed for the installation of the panels were produced locally. A particular feature of the project is that all the solar panels are installed on a raw-wood structure sustainably sourced from surrounding woods.

The Carayac solar park is expected to have an annual production of 32,000 kWh, which corresponds to the energy consumption of 220 inhabitants. Thus, on a long-term view costs will decrease significantly, it will lead to a reduction of pollutant emissions in the area and also create local employment.

Participatory photovoltaic of Pommerieux

This project enabled the installation of photovoltaic panels on three public buildings, with the aim of covering 80% of the electricity demand through renewable energies. The project has been financed through the French Civic Crowdfunding platform Colleacticity. The crowdfunding model chosen to finance this campaign was lending, raising a total of €20,000 through 46 co-financiers. The total amount of the investment for this project is €46,200, the rest of the funding being covered by a grant from GAL Sud Mayenne and the Contrat Régional du Pays de Craon.

As this is a lending modality, investors will benefit from an interest rate of 1.80% over 7 years. The minimum funding required to participate in the project was €100.

These examples show how through crowdfunding platforms, a company, a local authority or a community developing a renewable generation plant or energy efficiency measures can involve citizens and other stakeholders in the investment, allowing them to invest, become shareholders and benefit from the return on the investment.