Energy from the crowd - follow-up

By JJB

Further to the crowd-funding activities mentioned on this blog some months ago, some updates are now available.

Indeed, since the last blog post, a large number of projects were successfully financed on the Bettervest platform.

At first sight, certain projects' calculations may stir some questions, too - for example this project for "solar home systems" in Kenya. In the project description, it is considered that 800 families in Kenya will save in total roughly 80.000 EUR per year in kerosene expenses by replacing kerosene lamps with installations combining a 50W-photovoltaic module, LED lamps and a small battery. While this may be a sound goal in terms of development aid, it may seem surprising at first sight that this project is supposed to allow for an annual interest rate of 6%, for an invested sum of 237.800 EUR, with a full payback to the crowd-investors after 4 years.
As you can tell by doing a quick calculation, interest rate payments to the crowd-investors would amount to more than 36.000 EUR in total. Also, according to further project information, energy cost savings from the concerned 800 families would only be paid to the project during the first 4 years; afterwards, the Kenian families can benefit from their cost savings for their own household budget. Thus, if the estimated annual savings of 80.000 EUR were fully realized, this would generate 320.000 EUR for the project's budget after 4 years. After paying back, as mentioned above, the invested sum of 237.800 EUR plus interest rates of more than 36.000 EUR, this leaves only about 45.000 EUR to cover other expenses. Indeed, apart from administrative costs, these other expenses arise from the fixed costs (per kW and per installation) for the installation of 800 "Solar Home Systems" (45.000 EUR divided by 800 homes equals about 56 EUR per home; without applying any actualization rate on those expenses, for simplification). 

Nevertheless, kindly responding to my questions on this matter, Bettervest underlined that its partner company for this project, "SunTransfer", has already built up a solid network in Africa, and a considerable experience related to the technology and the logistics that shall be deployed. Therefore, such a relatively modest sum is indeed said to suffice for 800 of these small PV/LED/battery installations.

Moreover, the pictures of the project's successes (see below) are truly uplifting and inspiring.

By the way, Bettervest currently continues to offer a variety of different investment opportunities in Europe and Africa.

Source: Bettervest

Compared to this, the other recently mentioned online platform for crowd-funded energy investment, Econeers, seems to be much less creative. Indeed, there are currently no investment opportunities available. Also, the list of successfully concluded projects has not evolved since the last blog post some months ago.

Finally, concerning the "solarization" campaign for Greece, a total sum of more than 42.000 USD was collected. Of course, this is only a small amount, compared to the target of 1 million USD. According to the project's news update, the collected money suffices for the installation of solar panels on 7 houses in Rhodes, Greece. Therefore, an "energy revolution", as mentioned by this campaign, cannot be carried out by this project alone, of course. Nevertheless, it means a big improvement for the concerned families, as shown by the pictures and news - and the video - about the implementation of the campaign's objectives.

Furthermore, these campaigns also show a desire for solidarity in structural investments such as energy - on local, European and worldwide scales. However, it seems that even though voluntary small-scale investments can drive certain local improvements, supplementary action is needed in order to face the problems of climate change which, according to many analysts, remain very challenging even if taking into account the national reduction plans submitted for the COP21 deal of December 2015.