Practising energy solidarity is time- and resource-intensive. In turn, financing projects is an ongoing challenge.
In parallel to piloting new energy solidarity initiatives, CEES Partners actively pursued a range of alternative funding strategies.
To date, grants remain the backbone of the funding needed to create and sustain energy communities (ECs). Identifying relevant grants and completing applications is often a long and complicated process. Many grants are project-specific, meaning applications need to be tailored to the call. In some cases, receiving the full sum depends on fulfilling ambitious targets that might prove particularly challenging.
CEES partners stepped up to the challenge by seeking to align their financing strategies with the unique demands and nuances of the new work they were undertaking. Launching a charity shop and placing poster advertisements on bus stops proved successful in securing support from the general public in the UK and Croatia, respectively.
Over the course of the project, CEES Partners encountered diverse barriers and enablers specific to the contexts in which they operate.
UK: Making it easy to donate
ALIenergy and Repowering London operate in completely different contexts in the UK, but both rely heavily on grants. Working with households in rural, remote areas of Scotland, ALIenergy has high expenses related to distances Energy Advisors need to travel and the level of services people need. In one of the poorest and most diverse boroughs of the UK capital, Repowering London faces challenges related to language barriers and low incomes.
Both used social media campaigns and found that making it easier to donate – through QR codes on promotional material or donation buttons on websites – attracted more donors. To boost long-term revenues, ALIenergy opted to open a charity shop. They also found that marketing efforts to increase their overall visibility made it easier to approach potential investors – and convince some to support.
The UK government recently established a grant that could be of particular interest to ECs. The Energy Redress Fund collects fines from energy companies that violate regulatory rules and allocates this money to community energy groups.
Croatia: Success despite low awareness
Because awareness of energy poverty is low in Croatia, ZEZ knew that attracting individual donations would be a super high-risk strategy to enable their Energy Advice Home Visits campaign. Aiming for broad visibility among the public, they mobilised outreach on their website, social media, public transport stops, and community centres. They also partnered with a well-known foundation that could accept donations and provide tax receipts. These actions created some ‘media buzz’ and an invite to present on a morning TV programme. Having successfully hit their target for public donations, ZEZ was in a better position to ask corporations to come on board.
The search for energy solidarity financing in Croatia is complicated by the absence of a centralised government body dedicated to addressing energy poverty. ZEZ had to engage with various ministries and public authorities and, indeed, educate them about the issue.
France: Successful approaches prove hard to replicate
Several CEES Partners were keen to replicate an innovative scheme that is hugely successful for Enercoop and Énergie Solidaire. As an energy supplier, Enercoop gives its >80 000 clients the simple option to make micro-donations through their energy bills. The funds collected are transferred to Énergie Solidaire, which is legally structured as an endowment fund. As such, Énergie Solidaire can provide tax receipts (valued at 66% of the donation) to donors and redistribute these funds to non-profit organisations tackling energy poverty. This creates a steady stream of small donations that quickly add up.
The two entities are investigating schemes by which energy suppliers could donate surplus energy. The basic principle is that public authorities that generate more energy than they need could donate it to a supplier, who then sells it and donates the associated revenues to Énergie Solidaire. At present, this innovative concept carries a heavy administrative burden as suppliers need to contractually agree to each donation and parties need to actively communicate often.
Similar to the new Energy Redress Fund in the UK (described above), France has programmes that collect fines from energy companies to redistribute to others who are tackling energy poverty. Often, these support deep energy renovation of France’s poorest quality homes.
Les 7 Vents is a cooperative that carries out Shared and Supported Self-Renovation (3SR) with households experiencing energy poverty in Normandy. They receive funding through the programmes described in the preceding paragraph.
Keen to engage the public, Les 7 vents set out to adapt a micro-donation scheme by which customers in local shops would opt to ‘round-up’ the total of their purchases. Due to its status as a cooperative, Les 7 vents cannot offer tax deductions to donors, which is a major disincentive. As a solution, they directed donations to Enerterre, an association they collaborate with closely, which can issue tax receipts. Even with this aspect in place, the process proved too burdensome for small partners, Les 7 vents then approached large chain stores in the DIY industry. Most said it would take two years to implement and several already have such schemes to support charities that align with their missions.
In the end, other CEES Partners also found it impossible to replicate a micro-donation scheme, largely because they are not suppliers with large customer bases or do not have the right legal status to offer tax receipts to donors.
Portugal: Tapping EC members to avoid relying on grants
Coopérnico operates as both an energy cooperative and energy supplier. Critically, it is self-funded through members who choose to lend money which Coopernico then uses to install solar panels on buildings owned by charities. With lower energy bills, the charities can provide better services to their target groups and, over time, pay back the installation cost. At that point, the charity becomes the owner of the energy asset and Coopérnico repays the initial investors.
Coopérnico is now developing a scheme through which members could borrow money from each other to install their own solar panels. Success to date – Coopérnico now boasts >6 000 members – reflects that the cooperative works hard to build high levels of trust among members. In turn, they demonstrate a willingness to commit over the long term (most loans are over a 10-15 year period).
This blog was prepared by Eva Totterdill.
To read pertinent financing policy advice developed by CEES Partners, click through to CEES Financing Handbook: Policy Recommendations.
Additional content on financing energy solidarity mechanisms is found in the CEES Energy Solidarity Toolkit. Relevant blogs can be linked to directly: