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Peer-to-Peer Financing Mechanisms to Accelerate Renewable Energy Deployment

Author

Listed:
  • Kadra Branker

    (Queen's University [Kingston, Canada])

  • Emily Shackles

    (Queen's University [Kingston, Canada])

  • Joshua Pearce

    (MTU - Michigan Technological University)

Abstract

Despite the clear need to reduce greenhouse gas emissions, lack of access to capital and appropriate financing mechanisms has limited the deployment of renewable energy technologies (RETs). Feed-in Tariff (FIT) programs have been used successfully in many countries to make RETs more economically feasible. Unfortunately, the large capital costs of RETs can result in both the slow uptake of FIT programs and incomplete capture of deployment potential. Subsidies are concentrated in financial institutions rather than the greater population as traditional bank loans are required to fund RET projects. This paper critically analyzes and considers the political, financial and logistical risks of an innovative peer-to-peer financing mechanism. This mechanism has the goal of increasing RET deployment capacity under a FIT program in an effort to equitably distribute both the environmental and economic advantages throughout the entire population. Using the Ontario FIT program as a case study, this article illustrates how the guaranteed income stream from a solar photovoltaic system can be modeled as an investment and how peer-to-peer lending mechanisms can then be used to provide capital for the initial costs. The requirements for and limitations of these types of funding mechanisms for RETs are quantified and discussed and future work to deploy this methodology is described.

Suggested Citation

  • Kadra Branker & Emily Shackles & Joshua Pearce, 2011. "Peer-to-Peer Financing Mechanisms to Accelerate Renewable Energy Deployment," Post-Print hal-02120491, HAL.
    • Handle: RePEc:hal:journl:hal-02120491
    DOI: 10.1080/20430795.2011.582325
    Note: View the original document on HAL open archive server: https://hal.science/hal-02120491
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    References listed on IDEAS

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    Cited by:

    1. Laurence L. Delina & Rainbow Yi Hung Lam & Wing Shun Tang & Ka Ying Wong, 2023. "Mapping the actor landscape of a future fintech-funded renewable energy ecosystem in Hong Kong," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 13(3), pages 419-427, September.
    2. Zhou, Yuekuan & Lund, Peter D., 2023. "Peer-to-peer energy sharing and trading of renewable energy in smart communities ─ trading pricing models, decision-making and agent-based collaboration," Renewable Energy, Elsevier, vol. 207(C), pages 177-193.
    3. K. Branker & E. Shackles & J. M. Pearce, 2011. "Peer-to-peer financing mechanisms to accelerate renewable energy deployment," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 1(2), pages 138-155, April.
    4. Mundada, Aishwarya S. & Prehoda, Emily W. & Pearce, Joshua M., 2017. "U.S. market for solar photovoltaic plug-and-play systems," Renewable Energy, Elsevier, vol. 103(C), pages 255-264.
    5. B. T. Wittbrodt & J.M. Pearce, 2015. "Total U.S. cost evaluation of low-weight tension-based photovoltaic flat-roof mounted racking," Post-Print hal-02119670, HAL.
    6. Chiara Modanese & Hannu S. Laine & Toni P. Pasanen & Hele Savin & Joshua M. Pearce, 2018. "Economic Advantages of Dry-Etched Black Silicon in Passivated Emitter Rear Cell (PERC) Photovoltaic Manufacturing," Energies, MDPI, vol. 11(9), pages 1-18, September.
    7. Dinesh, Harshavardhan & Pearce, Joshua M., 2016. "The potential of agrivoltaic systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 299-308.
    8. Alafita, T. & Pearce, J.M., 2014. "Securitization of residential solar photovoltaic assets: Costs, risks and uncertainty," Energy Policy, Elsevier, vol. 67(C), pages 488-498.
    9. Cohen, Jed J. & Azarova, Valeriya & Kollmann, Andrea & Reichl, Johannes, 2021. "Preferences for community renewable energy investments in Europe," Energy Economics, Elsevier, vol. 100(C).

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