Crowdfunding for renewable and sustainable energy projects: An exploratory case study approach

Abstract

Global warming has become one of the major challenges faced by the world today. Use of renewable energy can help mitigate the adverse effects of climate change and environmental pollution. However, owing to high up-front costs and the risk of commercializing renewable energy initiatives compared with conventional technology, a barrier exists in securing financing of renewable energy projects. This article aims to explore the knowledge of the emerging crowdfunding in general and more specifically, to focus on how best to employ this new funding source for renewable and sustainable energy projects. Firstly, incorporation of literature findings is undertaken from two fields: crowdfunding and renewable energy development. A case study approach is employed to demonstrate how crowdfunding has been applied in renewable projects. Eight international cases were chosen to represent various crowdfunding models that differ in terms of reward and returns associated with the investment. Crowdfunding can play a significant role at the start of a renewable and sustainable energy project׳s life-cycle. A variety of crowdfunding approaches may be used to finance the early stages of renewable energy development, particularly when stakeholders are the beneficiaries, or the concerned groups related to environmental protection and sustainability. Crowdfunding is also suitable for supporting research and development efforts of innovative green technology start-ups. This article introduces crowdfunding as a new source of green financing and gives evidences for using crowdfunding in renewable and sustainable energy development, in comparison with other funding sources.