What are your financing options?

Community energy groups have developed a wide range of ways to finance projects because it is often difficult for community groups to raise money. The following examples highlight your main options:

Grants and support

Smaller programs and initiatives are often funded through grants, partnerships or donations. Many community projects also benefit from significant volunteering, low-bono or pro-bono expertise and in-kind support.

Community Power Hubs in Victoria created opportunities for multiple community energy groups to receive grants and progress projects. The structure also funded dedicated staff time to coordinate the groups.

Zero Emissions Noosa has a strong partnership with Noosa Shire Council that continues to offer support to the group.

Donations

Bendigo Sustainability Group has funded many projects with donations - particularly leveraging larger donations from business supporters. They have also retained ownership of some projects to benefit from the income.

CORENA - Citizens Own Renewable Energy Network Australia has built a fund of over $500,000 through mainly small donations. It maintains a revolving fund and lends these to community groups for energy transition projects.

Loans

CORENA is not the only community energy organisation with a revolving fund, although it is the main option for Australia wide loans.

COREM use their fund in the Mullimbimby region

The Energy Innovation Coop: EIOC runs a revolving fund in the Bass Coast region of Victoria.

Each fund has different criteria for lending money.

Cooperatives

Cooperatives can be distributing or non-distributing. Distributing cooperatives invite investment and can return profits to investors.

Hepburn Wind Coop: Hepburn Wind Coop raised the money for two wind turbines through this process.

The Energy Innovation Coop: EIOC is an example of a non-distributing Cooperative.

Pingala, Solar Harvest, PrePower One are all examples of cooperatives that have been established to drive investment into renewable energy while returning the benefits to local community investors.

Energy Democracy: Energy Democracy aims to establish stand alone cooperatives to suit each energy project that it develops.

Equity

Repower Shoalhaven was one of the early examples of a community energy group raising money for rooftop solar. The project was created as a special purpose vehicle to allow investment that could be repaid over time and with a dividend for investors.

Clearsky Solar links sophisticated investors with every project.

Crowdfunding

Enova fundraised its initial share capital in accordance with the strict finance raising regulations of the time.

DC Power was an early user of crowdfunding regulation which allowed it to fundraise amongst many, smaller investors.

Both retailers have since closed their businesses.

Highlighting other financing options

The links below take you to the 6 different financing projects suggested by this decision support tool. Each is about connecting businesses, community organisations and households to sources of finance:

  1. Setting up your own community investment vehicle so you can offer loans to projects.

  2. Setting up your own community revolving fund so you can offer loans to projects, possibly at low or no interest.

  3. Partner with a no-interest loans provider for investments in low income households.

  4. Promote building upgrade finance if your council supports rate-based financing for energy investments by ratepayers.

  5. Promote energy performance contracting because these guarantees can help a mainstream finance provider make a loan.

  6. Help projects get grants and finance. Grants and subsidies are regularly available for energy investments but often businesses, community organisations and households don't have their finger on the pulse to know when the money is available.

Most options rely on a sound business model before finance can be offered. Any energy project that makes a return can offer a sustained benefit for communities if it is the investor.

Other guides and resources

Summary of Green Loans by Energy Matters: Loans, subsidies and tax breaks continue to change but all can help get a project over the line.

Finance Basics for renewables - webinar: In 2017 Frontier Impact produced a number of financing guides with resources for setting up renewable energy projects