Skip to main content

Financing Consumer (Co-)Ownership of Renewable Energy Sources

Abstract

Financing and governance in the renewable energy (RE) sector differ across countries and regions. The country reports in Chapters 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, and 27 illustrate this wide variance of structures to be found around the world, summarised in the comparative tables in Chapter 28 with regard to the resulting ownership structures distinguishing between communities of interest, communities of place and communities of interest and place. This chapter investigates commonalities and differences in the financing of consumer (co-)ownership in the countries analysed in this book. As the country chapters illustrate, contractual arrangements vary significantly within and between countries. Unlike geography or culture—within the boundaries of the legal framework—it is up to the contracting parties to choose the contractual settlement they deem most appropriate for the given project. To cast light on the reasons and the process of this choice, we present principles and decision criteria to select “appropriate” financing structures complementing this normative perspective with a description of financial and legal structures observed in the countries under examination. As investment motives largely determine what to be considered “appropriate” for the parties involved, we start with a brief overview of research on investment behaviour and motives, focusing on investments involving consumer (co-)ownership. Besides, we summarise some of the observations from the country chapters regarding the link between consumer co-financing and social investment.

This is a preview of subscription content, access via your institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • DOI: 10.1007/978-3-319-93518-8_6
  • Chapter length: 24 pages
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
eBook
USD   139.00
Price excludes VAT (USA)
  • ISBN: 978-3-319-93518-8
  • Instant PDF download
  • Readable on all devices
  • Own it forever
  • Exclusive offer for individuals only
  • Tax calculation will be finalised during checkout
Hardcover Book
USD   179.99
Price excludes VAT (USA)
Fig. 6.1

References

  • Achleitner, A.-K., Pöllath, R., & Stahl, E. (2007). Finanzierung von Sozialunternehmern: Konzepte zur finanziellen Unterstützung von Social Entrepreneurs. Stuttgart: Schäffer-Poeschel.

    Google Scholar 

  • Aghion, P., & Bolton, P. (1992). An incomplete contracts approach to financial contracting. Review of Economic Studies, 59(3), 473–494.

    CrossRef  Google Scholar 

  • Agrawal, A. (2012). Risk mitigation strategies for renewable energy project financing. Strategic Planning for Energy and the Environment, 32(2), 9–20.

    CrossRef  Google Scholar 

  • Anheier, H. K. (2014). Nonprofit organizations: Theory, management, policy (2nd ed.). London: Routledge.

    CrossRef  Google Scholar 

  • Ashden Trust. (2008). Cooperativa Regional de Eletrificação Rural do Alto Uruguai Ltda (CRERAL): Cooperative uses mini hydro to increase electricity supply on local grid. Retrieved from https://www.ashden.org/winners/cooperativa-regional-de-eletrifica%C3%A7%C3%A3o-rural-do-alto-uruguai-ltda-creral.

  • Ayadi, R., Llewellyn, D., Schmidt, R., Arbak, E., & Pieter de Groen, W. (2010). Investigating diversity in the banking sector in Europe: Key developments, performance and role of cooperative banks. CEPS Paperbacks, Brussels.

    Google Scholar 

  • Barasinska, N., Schäfer, D., & Stephan, A. (2008). Financial risk aversion and household asset diversification. DIW Discussion Papers No. 807, Berlin. Retrieved from http://www.diw.de/documents/publikationen/73/diw_01.c.87574.de/diw_sp0117.pdf.

  • Barber, B. M., & Odean, T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. Quarterly Journal of Economics, 116(1), 261–292.

    CrossRef  Google Scholar 

  • Bauwens, T. (2016). Explaining the diversity of motivations behind community renewable energy. Energy Policy, 93, 278–290.

    CrossRef  Google Scholar 

  • Beck, T., & Levine, R. (2002). Industry growth and capital allocation: Does having a market-or bank-based system matter? Journal of Financial Economics, 64(2), 147–180.

    CrossRef  Google Scholar 

  • Bergek, A., Mignon, I., & Sundberg, G. (2013). Who invests in renewable electricity production? Empirical evidence and suggestions for further research. Energy Policy, 56, 568–581.

    CrossRef  Google Scholar 

  • Bieg, H., Kußmaul, H., & Waschbusch, G. (2016). Finanzierung (3rd ed.). Munich: Vahlen.

    CrossRef  Google Scholar 

  • Brockmeier, T. (2007). Zur Reform des deutschen Genossenschaftsgesetzes: Frischer Wind durch das Statut der Europäischen Genossenschaft. In T. Brockmeier & U. Fehl (Eds.), Volkswirtschaftliche Theorie der Kooperation in Genossenschaften (pp. 831–894). Göttingen: Vandenhoeck & Ruprecht.

    Google Scholar 

  • Bürer, M. J., & Wüstenhagen, R. (2009). Which renewable energy policy is a venture capitalist’s best friend? Empirical evidence from a survey of international cleantech investors. Energy Policy, 37(12), 4997–5006.

    CrossRef  Google Scholar 

  • Campbell, J. Y. (2006). Household finance. Journal of Finance, 61(4), 1553–1604.

    CrossRef  Google Scholar 

  • Dóci, G., & Vasileiadou, E. (2015). “Let’s do it ourselves”: Individual motivations for investing in renewables at community level. Renewable and Sustainable Energy Reviews, 49, 41–50.

    CrossRef  Google Scholar 

  • Ebers Broughel, A., & Hampl, N. (2017). Community financing of renewable energy projects in Austria and Switzerland: Profiles of potential investors. IWÖ Working Paper Series, St. Gallen. Retrieved from https://www.alexandria.unisg.ch/253134/1/Ebers_Hampl_2017_UNISG_working_paper.pdf.

  • Esty, B. C. (2004). Modern project finance: A casebook. Hoboken, NJ: Wiley.

    Google Scholar 

  • Fleiß, E., Hatzl, S., Seebauer, S., & Posch, A. (2017). Money, not morale: The impact of desires and beliefs on private investment in photovoltaic citizen participation initiatives. Journal of cleaner production, 141, 920–927.

    CrossRef  Google Scholar 

  • Gamel, J., Menrad, K., & Decker, T. (2016). Is it really all about the return on investment? Exploring private wind energy investors’ preferences. Energy Research & Social Science, 14, 22–32.

    CrossRef  Google Scholar 

  • Gamma, K., Stauch, A., & Wüstenhagen, R. (2017). 7th consumer barometer of renewable energy. St. Gallen. Retrieved from http://www.iwoe.unisg.ch/kundenbarometer.

  • Goedkoop, F., & Devine-Wright, P. (2016). Partnership or placation? The role of trust and justice in the shared ownership of renewable energy projects. Energy Research & Social Science, 17, 135–146.

    CrossRef  Google Scholar 

  • Guiso, L., Sapienza, P., & Zingales, L. (2018). Time varying risk aversion. Journal of Financial Economics. https://doi.org/10.1016/j.jfineco.2018.02.007.

    CrossRef  Google Scholar 

  • Guiso, L., & Sodini, P. (2013). Household finance: An emerging field. In G. Konstantinides, M. Harris, & R. M. Stulz (Eds.), Handbooks in finance: Vol. 21. Handbook of the economics of finance. 2B: Financial markets and asset pricing (pp. 1397–1532). Amsterdam: Elsevier.

    Google Scholar 

  • Hall, S., Foxon, T. J., & Bolton, R. (2016). Financing the civic energy sector: How financial institutions affect ownership models in Germany and the United Kingdom. Energy Research & Social Science, 12, 5–15.

    CrossRef  Google Scholar 

  • Hall, S., Roelich, K. E., Davis, M. E., & Holstenkamp, L. (2018). Finance and justice in low-carbon energy transitions. Applied Energy, 222, 772–780.

    CrossRef  Google Scholar 

  • Hart, O. (1995). Firms, contracts and financial structure. Clarendon lectures in economics. Oxford: Clarendon Press.

    CrossRef  Google Scholar 

  • Helmke, A. C. (2009). Windenergie in Südamerika: Darstellung und Analyse ökonomischer Einflussgrößen in Argentinien, Brasilien und Chile. Wiesbaden: Gabler.

    CrossRef  Google Scholar 

  • Holstenkamp, L. (2014). Local investment schemes for renewable energy: A financial perspective. In M. Peeters & T. Schomerus (Eds.), New horizons in environmental and energy law. Renewable energy law in the EU. Legal perspectives on bottom-up approaches (pp. 232–255). Cheltenham: Edward Elgar Publishing.

    Google Scholar 

  • Holstenkamp, L., & Kahla, F. (2016). What are community energy companies trying to accomplish? An empirical investigation of investment motives in the German case. Energy Policy, 97, 112–122.

    CrossRef  Google Scholar 

  • Holstenkamp, L., Kahla, F., & Degenhart, H. (2018). Finanzwirtschaftliche Annäherungen an das Phänomen Bürgerbeteiligung. In L. Holstenkamp & J. Radtke (Eds.), Handbuch Energiewende und Partizipation (pp. 281–301). Wiesbaden: Springer VS.

    CrossRef  Google Scholar 

  • Holstenkamp, L., & Ulbrich, S. (2010). Bürgerbeteiligung mittels Fotovoltaikgenossenschaften: Marktüberblick und Analyse der Finanzierungsstruktur. Working paper series in business and law No. 8, Lüneburg. Retrieved from https://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ifwr/files/Arbeitpapiere/WPBL8-101215.pdf.

  • Kalkbrenner, B. J., & Roosen, J. (2016). Citizens’ willingness to participate in local renewable energy projects: The role of community and trust in Germany. Energy Research & Social Science, 13, 60–70.

    CrossRef  Google Scholar 

  • de la Hoz, J., Martín, H., Miret, J., Castilla, M., & Guzman, R. (2016). Evaluating the 2014 retroactive regulatory framework applied to the grid connected PV systems in Spain. Applied Energy, 170, 329–344.

    CrossRef  Google Scholar 

  • Labatt, S., & White, R. R. (2007). Carbon finance: The financial implications of climate change. Wiley finance series. Hoboken, NJ: Wiley.

    Google Scholar 

  • Laffont, J.-J., & Martimort, D. (2009). The theory of incentives: The principal-agent model. Princeton and Oxford: Princeton University Press.

    CrossRef  Google Scholar 

  • Laville, J.-L. (2014). The social and solidarity economy: A theoretical and plural framework. In J. Defourny, L. Hulgård, & V. A. Pestoff (Eds.), Social enterprise and the third sector. Changing European landscapes in a comparative perspective (pp. 102–113). London: Routledge.

    Google Scholar 

  • Leuphana University of Lüneburg, & Nestle, U. (2014). Marktrealität von Bürgerenergie und mögliche Auswirkungen von regulatorischen Eingriffen. Lüneburg, Kiel. Retrieved from https://www.leuphana.de/professuren/finanzierung-finanzwirtschaft/forschung/abgeschlossen/buergerenergie.html.

  • Maly, C. (2014). Legal aspects of local engagement: Land planning and citizens’ financial participation in wind energy projects. In M. Peeters & T. Schomerus (Eds.), New horizons in environmental and energy law. Renewable energy law in the EU. Legal perspectives on bottom-up approaches (pp. 210–231). Cheltenham: Edward Elgar Publishing.

    Google Scholar 

  • Maly, C., Meister, M., & Schomerus, T. (2018). Finanzielle Bürgerbeteiligung: Rechtlicher Rahmen und Herausforderungen. In L. Holstenkamp & J. Radtke (Eds.), Handbuch Energiewende und Partizipation (pp. 371–386). Wiesbaden: Springer VS.

    CrossRef  Google Scholar 

  • Masini, A., & Menichetti, E. (2013). Investment decisions in the renewable energy sector: An analysis of non-financial drivers. Technological Forecasting and Social Change, 80(3), 510–524.

    CrossRef  Google Scholar 

  • Mautz, R., Fleiß, E., Hatzl, S., Reinsberger, K., & Posch, A. (2018). Bottom-up-Initiativen im Bereich Photovoltaik in Deutschland und Österreich: Rahmenbedingungen und Handlungsressourcen. In L. Holstenkamp & J. Radtke (Eds.), Handbuch Energiewende und Partizipation (pp. 597–610). Wiesbaden: Springer VS.

    CrossRef  Google Scholar 

  • Mendonça, M., Lacey, S., & Hvelplund, F. (2009). Stability, participation and transparency in renewable energy policy: Lessons from Denmark and the United States. Policy and Society, 27(4), 379–398.

    CrossRef  Google Scholar 

  • Mignon, I., & Bergek, A. (2016). Investments in renewable electricity production: The importance of policy revisited. Renewable Energy, 88, 307–316.

    CrossRef  Google Scholar 

  • Morris, C., & Jungjohann, A. (2016). Energy democracy: Germanys energiewende to renewables. Cham: Springer International Publishing.

    CrossRef  Google Scholar 

  • Morrison, R. (Ed.). (2012). The principles of project finance. Farnham, Surrey: Gower.

    Google Scholar 

  • Nevitt, P. K., & Fabozzi, F. J. (2000). Project financing. London: Euromoney Books.

    Google Scholar 

  • Olsen, B. E. (2014). Regulatory financial obligations for promoting local acceptance of renewable energy projects. In M. Peeters & T. Schomerus (Eds.), New horizons in environmental and energy law. Renewable energy law in the EU. Legal perspectives on bottom-up approaches (pp. 189–209). Cheltenham: Edward Elgar Publishing.

    Google Scholar 

  • Olsen, B. E. (2018). Community Wind in Denmark. In L. Holstenkamp & J. Radtke (Eds.), Handbuch Energiewende und Partizipation (pp. 1037–1046). Wiesbaden: Springer VS.

    CrossRef  Google Scholar 

  • Perridon, L., Steiner, M., & Rathgeber, A. W. (2017). Finanzwirtschaft der Unternehmung (16th ed.). Munich: Vahlen.

    Google Scholar 

  • Pratt, M., & Crowe, A. (1995). Mezzanine finance. Bank of England Quarterly Bulletin, 35, 370–374.

    Google Scholar 

  • Radtke, J. (2016). Bürgerenergie in Deutschland: Partizipation zwischen Gemeinwohl und Rendite. Research. Wiesbaden: Springer VS.

    CrossRef  Google Scholar 

  • Renneboog, L., & Spaenjers, C. (2012). Religion, economic attitudes, and household finance. Oxford Economic Papers, 64(1), 103–127.

    CrossRef  Google Scholar 

  • Ricciardi, V. (2008). The psychology of risk: The behavioral finance perspective. In F. J. Fabozzi (Ed.), Handbook of finance. Vol. 2: Investment management and financial management (pp. 85–111). Hoboken, NJ: Wiley.

    Google Scholar 

  • Riley Jr., W. B., & Chow, K. V. (1992). Asset allocation and individual risk aversion. Financial Analysts Journal, 48(6), 32–37.

    CrossRef  Google Scholar 

  • Schooley, D. K., & Worden, D. D. (1999). Investors’ asset allocations versus life-cycle funds. Financial Analysts Journal, 55(5), 37–43.

    CrossRef  Google Scholar 

  • Toke, D. (2011). Ecological modernisation and renewable energy. Basingstoke: Palgrave Macmillan.

    CrossRef  Google Scholar 

  • Vasileiadou, E., Huijben, J. C. C. M., & Raven, R. P. J. M. (2016). Three is a crowd? Exploring the potential of crowdfunding for renewable energy in the Netherlands. Journal of Cleaner Production, 128, 142–155.

    CrossRef  Google Scholar 

  • Vaughan, A. (2014). Green energy co-ops blocked by government regulator. The Guardian. Retrieved from https://www.theguardian.com/environment/2014/aug/15/green-energy-co-ops-blocked-by-government-regulator.

  • Vilain, M. (2006). Finanzierungslehre für Nonprofit-Organisationen: Zwischen Auftrag und ökonomischer Notwendigkeit. Wiesbaden: Springer VS.

    Google Scholar 

  • Volz, R. (2012). Genossenschaften im Bereich erneuerbarer Energien. Status quo und Entwicklungsmöglichkeiten eines neuen Betätigungsfeldes. Hohenheim, Stuttgart-Hohenheim: Forschungsstelle für Genossenschaftswesen an der Univ.

    Google Scholar 

  • Williamson, O. E. (1988). Corporate finance and corporate governance. Journal of Finance, 43(3), 567–591.

    CrossRef  Google Scholar 

  • Wiser, R. H., & Pickle, S. J. (1998). Financing investments in renewable energy: The impacts of policy design. Renewable and Sustainable Energy Reviews, 2(4), 361–386.

    Google Scholar 

  • Wlokas, H. L. (2015). A review of the local community development requirements in South Africa’s renewable energy procurement programme. WWF ZA Technical Paper, Cape Town. Retrieved from http://www0.sun.ac.za/cst/wp-content/uploads/2017/04/WWF_Wlokas_Review-of-local-community-development-in-REIPPP_2015.pdf.

  • Wüstenhagen, R., & Menichetti, E. (2012). Strategic choices for renewable energy investment: Conceptual framework and opportunities for further research. Energy Policy, 40, 1–10.

    CrossRef  Google Scholar 

  • Wüstenhagen, R., & Teppo, T. (2006). Do venture capitalists really invest in good industries? Risk-return perceptions and path dependence in the emerging European energy VC market. International Journal of Technology Management, 34(1–2), 63–87.

    CrossRef  Google Scholar 

  • Yildiz, Ö., Rommel, J., Debor, S., Holstenkamp, L., Mey, F., Müller, J. R., et al. (2015). Renewable energy cooperatives as gatekeepers or facilitators? Recent developments in Germany and a multidisciplinary research agenda. Energy Research & Social Science, 6, 59–73.

    CrossRef  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Lars Holstenkamp .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and Permissions

Copyright information

© 2019 The Author(s)

About this chapter

Verify currency and authenticity via CrossMark

Cite this chapter

Holstenkamp, L. (2019). Financing Consumer (Co-)Ownership of Renewable Energy Sources. In: Lowitzsch, J. (eds) Energy Transition. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-93518-8_6

Download citation

  • DOI: https://doi.org/10.1007/978-3-319-93518-8_6

  • Published:

  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-319-93517-1

  • Online ISBN: 978-3-319-93518-8

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)