Crowdfunding for solar photovoltaics development: A review and forecast
Introduction
Growing environmental concerns have motivated policy makers to propose incentives and plans to diversify their energy portfolio by shifting from the dominant use of non-renewable to renewable energy. Many countries have also been supporting the use of these technologies by providing public financing and subsidies [1], [2], [3]. Hence, significant progress in the development of renewable energy in terms of production and consumption has made the industry prominent in recent years [4], [5].
Among the various renewable technologies, photovoltaics are the most popular, followed by the wind and to a much lesser extent biomass and hydropower [6]. Solar photovoltaics (PV) technology is the conversion of sunlight into energy without the use of mechanics and does not produce environmental emissions. Hence, it has been recognized as a clean and renewable energy source with huge potential. An increasing number of countries has tried to promote the use of this energy source within their borders. Solar PV adoption has grown significantly in the year 2014, whereby an estimated amount of 40 GW of solar PV was installed among the total global energy capacity of 117 GW. The majority of new adoptions came from countries like Japan, China, and the United States, with Latin America, Africa and the Middle East experiencing growth in the solar PV market as well [7].
In Singapore, due to various constraints, other renewable energy sources including geothermal energy, hydroelectric power, or wind energy does not hold as much potential as compared to solar PV technology [1]. Fig. 1 illustrates the annual installed capacity and the cumulative installed PV capacity in Singapore from 2009 to 2015. In 2014, the Singapore government announced the plans to increase the amount of solar energy adopted by governmental agencies. The target was to hit 350 MWp by 2020, which would amount to 5% of the forecasted electricity demand in Singapore [8]. As such, several initiatives have been set up by Singapore, including solar test bedding to be conducted by the Housing and Development Board (HDB) to gather technical knowledge on the installation of extensive solar systems in its precincts [9], and the SolarNova Singapore program launched to assist in the coordination and the collation of demands for solar PV adoption across the Government buildings involved [10]. It has been discovered that HDB buildings in Singapore have good PV integration potentials [11].
The downside to this technology, however, lies in the fact that its cost has been less competitive as compared to other electricity generation options [13]. Traditionally, Solar PV projects have been driven significantly by policy support such as PV Feed-in Tariffs (FiTs) provided by governments [7]. As such, studies have been made to determine if alternative solar financing methods such as Power Purchase Agreements (PPA), Solar Leasing, Crowdfunding or other hybrid models that leverage on private capital are feasible compared to the traditional PV FiTs. Alternative solar financing methods have been established over recent years. One relatively new solar financing method that has seldom been studied is Solar Crowdfunding (SCF). Several studies have been conducted on crowdfunding for other applications of renewable energy. For instance, based on qualitative methods, Dilger [14] explored the potential of crowdfunding for the business model of energy cooperatives, indicating that although most cooperatives are not familiar with crowdfunding, the potential exists for crowdfunding to support energy cooperatives, especially the equity-based crowdfunding. Zhu et al. [15] developed a game model to investigate the potential of crowdfunding in supporting the construction of charging piles for electric vehicle (EV). Similarly, Zhang et al. [16] employed the SWOT analysis to examine the potential of using crowdfunding to support the development of distributed PV water pumping systems in China. However, there are few studies specifically investigating crowdfunding for solar PV.
More importantly, even though the studies above contribute to the understanding of crowdfunding in the energy-related area, there are few quantitative studies on crowdfunding. The several available quantitative studies on crowdfunding mostly utilize data from crowdfunding platforms, with few studies forecasting the development potential of crowdfunding [17], [18]. It has been argued that more research on the mechanisms, including the potential factors influencing the success of crowdfunding campaigns is urgently needed [19]. It seems that although millions of crowdfunding investors have generated over a billion dollars in crowdfunding investments and donations [20], there is still lack of the academic knowledge in the dynamics of successful crowdfunding, [21] the potential of crowdfunding, and specifically the crowdfunding for solar PV, namely SCF.
To respond to the above gaps of knowledge, this study aims to review the concepts and various models of solar crowdfunding in general and propose a system dynamics model to simulate the potential of SCF by taking Singapore as an example. The focus of this study is to explore the various factors that impact the success of solar crowdfunding and create a system dynamics model that would not only show the causal relationships between the various impacting factors, but also could predict the development potential of solar crowdfunding. By doing so, this study contributes to the policy-making of financing for solar PV.
Section snippets
Crowdfunding concept and development
Governments across the globe have been offering incentives to encourage solar installations on private properties. For instance, the Non-business Energy Property Tax Credit [22] offering incentives of 10% of the cost up to US$500 or a specific amount from $50-$300 for an existing home is just one of the many schemes provided by the US government. Table 1 below summarizes the various financing models supporting solar systems in buildings [23].
Among the above financing approaches, solar
Concepts of system dynamics
The simulation model proposed in this study is developed based on system dynamics, a method developed by Jay Forrester in the 1960s to examine complex systems [57]. System dynamics is typically used to understand the effects of policies ranging from public policies to business policies [58]. It could produce reliable forecasts of trends based on the understanding of market behavior [59]. The system dynamics model has been used in numerous domains, such as project planning and control [60], [61]
Impacts of solar development speed on solar crowdfunding
In Singapore, the future cumulative solar PV has been studied by Solar Energy Research Institute of Singapore in the Solar Photovoltaics Roadmap of Singapore [79]. The forecast considers three factors, namely area efficiency, expected technological advancements, and space constraints in Singapore. The solar roadmap [79] investigates two scenarios, namely the Baseline Scenario (BAS) and the Accelerated Scenario (ACC). Based on these two scenarios, two sets of data were generated with different
Conclusions
Solar energy has developed rapidly during the past decade. Since crowdfunding taps on investments from the public, it could potentially contribute to the financing of solar projects. Due to its novelty, crowdfunding for renewable energy has received little attention from existing studies. This study aims to provide not only a review of crowdfunding concepts in general and for renewable energy specifically, but also a system dynamics model for forecasting the potential of solar crowdfunding in
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