By Andrew Williams

CORENA

In 2013, the CORENA Fund (Citizens Own Renewable Energy Network Australia) project was established to raise finance for the construction of a 50MW CSP solar thermal plant in Australia. The Network's financing mechanism is very simple: supporters donate directly into a specific solar thermal 'Big Win' project account, where funds are held until enough accumulate for a project to begin.

As Margaret Hender, Chair of CORENA , explains, if around 720,000 people were willing to 'chip in' $8/week it would equate to $300m in just one year, roughly enough to fund a 50MW CSP plant with three hours of molten salt storage.

For her, there are 'several key advantages' of funding a CSP project via donations rather than investment, including the fact that it removes the cost of capital from the overall project cost and it enables 'highly desirable projects that are not yet commercially viable' to go ahead. However, she admits that crowdfunding does suffer from 'one big disadvantage' in that it is a 'major challenge' to raise such large sums via voluntary contributions, particularly since this model is not yet familiar to most people.

'Chipping In'

So far CORENA has raised $37,436, which Hender says is 'woefully short of the target amount,' but does indicate that the aim and the funding model 'resonate with more than a few people.' For Hender, the main challenge is what she calls the 'drop in the ocean' hurdle.
"There probably are 720,000 Australians who would happily chip in $8 a week as long as they could feel confident that the other 719,999 would also chip in. This hurdle is obvious every time CORENA starts a new Quick Win project, a similar revolving fund model that funds small solar PV installations of up to $20,000 for community organisations. Donations might start off relatively slowly, but the last few thousand dollars rush in very quickly," she says.

For Hender, alliances with other climate-related groups, and even CSP groups, would be a 'big help' in reaching funding targets, but she reveals that it is 'difficult' to attract alliances without a detailed and costed plan, something that she says is 'a circuitous problem with no obvious solution.'

"Obviously it is a challenge to embark on such an ambitious crowdfunding endeavour when there is no similar precedent to indicate how much money is likely to be donated. CORENA deals with this uncertainty by assuring donors that, however much is raised, it will be put to good use in a renewable energy project, even if it has to be a much smaller solar PV or similar project," she says.

Focused Sun

US-based company Focused Sun has also used crowdfunding in an attempt to raise finance for its previously unpublicised hybrid CPV-CSP modules. As Shawn Buckley, President of Focused Sun, explains, the company had previously tried to lever venture capital sources but was hampered by the Solyndra bankruptcy.

"Asian PV solar panels had dropped in price such that everyone thought they were unbeatable. In angel funding we ran into the same issue: we were unproven and how could we beat Asian pricing," he says.

"We wanted to see if we could raise funding through alternative sources than VC and angel financing. Our primary effort was to publicize our hybrid product to potential investors. Crowdfunding was one arm of a publicity campaign that included press releases and magazine articles, and from a publicity perspective we were pleased with the results," he adds.

However, from a donation perspective, Buckley admits that the crowdfunding initiative was 'disappointing,' and only managed to raise 'a little over 1%' of the goal. The company's business model is to build local factories to make its hybrid panels and Buckley reveals that only fifty interested parties registered on the company's crowdfunding website to start a solar factory.

In Buckley's view, crowd-funding suffers because it is 'based on superficial, not substantive, issues' and concentrates too much on how many people 'like' an idea and are prepared to 'follow' a company than on underlying economics.

"Economics is the big question in solar, especially CSP where the projects are larger. It's not the only issue that makes a successful CSP solar project, but it’s heads and shoulders above whatever is next," he says.

"I don’t see crowdfunding as a way to finance small scale solar. Some solar has been successful at crowdfunding - Solar Roadways, for example - but I don't believe it’s viable in general. We believe that there are alternative funding methods for small-scale CSP including project financing, power purchase agreements and energy partnerships and we are exploring all of these," he adds.