The Citizen Funding: An Alternative to Finance Renewable Energy Projects

Abstract

Nowadays, energy transition is a crucial issue to achieve sustainability. Emergent works emphasize the need to shift from a centralized energy production, based on large-scale production unit, to a more distributed one, based on small-scale and flexible production units. Therefore, energy projects cannot be longer dissociated from territories in order to better fit with local specificities. Moreover, such projects do not only focus on energy supply but also provide a variety of services, being closer to the end-user / citizen than traditional energy companies.The implementation of these territorial energy projects addresses a triple technical, legal and financial challenge, in order to create sustainable value on territories. Indeed, as Product/Service-Systems (PSS), these projects require high investments and the involvement of the future end-user as much as possible. An efficient way to involve the end-user is to allow its participation as a finance provider. This paper focuses on financial challenges and on alternative models to finance renewable energy projects through citizen funding. To do so, we analysed five alternative funding models both on an economic and “end-user/citizen” points of view. Our study underlines the heterogeneity of models in terms of value proposal, citizen involvement, governance or implantation on the territories, and proposes a new classification of these models.