Crowdfunding websites such as Kickstarter and IndieGoGo work on a relatively simple premise; someone with the idea for a product or service turns to the masses on the internet to gain the means, with each ‘backer’ promised something in return for their investment. The idea has proven massively popular for content creators, independent film makers and the video game industry – but could crowdfunding be used to tackle something as big as the UK’s renewable, commercial energy goals?
That, as it happens, is exactly what climate change minister Greg Barker has in mind as he announced he saw a huge role for crowdfunding at the launch of the Community Energy Strategy this week.
Having held stakeholder meetings last year to identify the viability of the prospect, Barker said crowdfunding could be used to finance a multitude of projects in the energy sector, with backing not limited to just small scale schemes.
“Government has a really important role in helping seed these projects – giving them the cash to pull together viable, commercial projects that are going to be sustainable from private sector investment over the long term,” he said, at the Community Energy Strategy launch.
“But as they scale up they’re going to be looking for different sources of cash – not just from conventional bank loans but other opportunities. Crowdsourcing, although relatively small at the moment, has real potential to take off at scale.”
Barker went on to discuss the research already committed to the potential of such a scheme, with the minister adamant that there is already a massive demand for individuals and communities to get involved in energy projects.
“People will be surprised at just how many potential savers and investors there are out there who would like to put at least some of their money into long-term schemes,” Barker said. “When I see crowdfunding I see huge potential to open up a brand new market. I think [crowdfunding] will emerge as an increasingly exciting tool for community energy projects.”
The government will see crowdfunding as a great shortcut to help it meet some of the goals stipulated by the European Union. As well as renewable energy goals and recycling rates, ministers have already committed to having 3GW of ‘green’ energy capacity under community ownership by 2020.
As with any good crowdfunding exercise, there have to be ‘stretch-goals’ – incentives – to get people excited and involved in such a scheme.
We wonder whether Mr. Barker would agree to fixing energy prices until 2020 if communities across the UK stumped up the cash to help them meet EU energy goals? We can only hope!