August 2015 Exchange Issue 18 Crowdfunding and the Energy Sector Guest Author: Dr. Chiara Candelise Research Fellow, IEFE, Bocconi University, Milan
[email protected] 1 Introduction The lack of access to credit and other financial services is of access to capital beyond traditional financial systems. increasingly recognized as one of the biggest obstacles to socio-economic development and poverty reduction. At the same time, liberalization in the energy markets and Despite universal financial access has been increasing climate change mitigation policies have been driving a worldwide (e.g. the number of adults with a bank account paradigm shift in the energy systems toward cleaner and has risen from 51% in 2011 to 62% in 2014), full financial more distributed energy generation. This has triggered, inclusion, i.e. access to a range of quality financial services on one hand, the need for further investments in energy at affordable prices, is still lagging behind (e.g. millions of assets and, on the other hand, a quite radical change bank accounts are dormant or used for narrow purposes in the role of energy consumers, leading the way to such as receiving salary) (Kelly and Rhyne, 2015). For dynamics of co-provision and customer engagement some time now, instruments of alternative finance such in the production, delivery and management of energy. as microcredit and microfinance have been developed worldwide to respond to such needs and to increase accessibility to capital for the less ‘bankable’ projects. This paper provides an overview of the development of crowdfunding worldwide, pointing out its applicability to the energy sector and the potential benefits accruing from it.