Collective financing of renewable energy

The transition to renewable energies (RE) is a costly endeavour. An increase in collectively financed RE projects will contribute to financing the energy transition. In case of decentralised energy production, there are additional benefits: collective financing of RE enhances the participation of citizens and municipalities, boosts local identification, and generates incomes and revenues for local economies. Energy cooperatives are a typical form of collective financing of RE.

While energy cooperatives have been studied in various countries, Swiss energy cooperatives had remained unexplored until now. Moreover, hardly any attention had been paid to their business models and financing strategies, the involved actors, forms of collaboration, success factors, and perspectives. The project filled this gap: the research team investigated the situation of Swiss and German cooperatives and contrasted the findings. It also explored the embedding of energy cooperatives, in particular the political context at the local level.

Energy cooperatives can play an important role in fostering the transformation of the energy system at the local and regional level: they take up new debates in the energy sector and in society and serve as a bridge between the two realms. Being “pioneers”, they apply new technologies and organisational procedures (e.g. on-site consumption), collaborate intensively with municipalities, advance municipal energy policies and their implementation, and they reap the benefits of such collaboration. The federalist system provides enough leeway for municipalities to collaborate. Yet, the quantity of renewable energy produced by energy cooperatives is modest: the many cooperatives producing electricity with PV together account for only a 1-1.5% share of the total PV electricity produced in Switzerland and Germany respectively.

Implications for research

The survey of energy cooperatives carried out in this project is the first in Switzerland, making representative information available for the first time. The data is used for analyses in this project but will also be accessible to other researchers. What is more, the Germany survey allows for comparisons between the two countries. As Germany is considered an Eldorado for energy cooperatives, such comparisons are insightful when it comes to supporting structures.

In addition, four case studies were carried out in each country to investigate successful cooperatives. They make it possible to infer how to provide optimum support for this sector. The main focus was on energy governance, which here primarily concerns the local level. The important role of municipalities for energy cooperatives was revealed, as well as the fact that energy cooperatives can be a pillar in local energy policy.

Implications for practice

Now, energy cooperatives have information about their field that may fill a gap also caused by a dearth of exchanges between them so far. Furthermore, the project showed that conditions for energy cooperatives could be improved by strengthening the competencies of their staff/members and encouraging networking between cooperatives. If Switzerland wants to foster energy cooperatives and hence decentralised energy production, it will need to improve feed-in-tariffs and ease on-site consumption conditions. Municipality associations could use the insights to develop support measures for other municipalities.

Collective financing of renewable energy projects in Switzerland and Germany: comparative analysis and implications for energy transition policies