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Crowdlending, an alternative to finance solar projects

Decarbonization targets for 2030 have passed from 40% to 55% in the reduction of emissions. The process to reach the finish line, in addition to being ambitious, must be efficient and achieve neutrality at the lowest possible cost. In this context, the experts from Flobers, the platform for investing in renewable energies, maintain that these clean energies, especially photovoltaic, are the fastest and optimal way to reach the goal set. “Not only are emissions reduced, they are sustainable and competitive alternatives”adds its CEO, Diana Plané.

In 2030 it is expected to reach around 65% renewable electricity generation, but this requires a boost to the sector. The transition to a carbon-neutral economy is possible, but to do it quickly, it must be carried out through large generation parks. The problem, they point out from Floblers, is the scarcity of access and connection points. “The evacuation lines are saturated and until a reform of electrical infrastructures is carried out, this growth will not be possible”warns Plané.

Faced with this situation, another option is to bet on distributed generation, that is, instead of developing a minority of large parks, start up many small ones that would be used to residential and industrial self-consumption, energy communities and small installations close to consumption. As pointed out by Flobers, to connect a power self-consumption of less than 15kW it is not necessary to request an access and connection point, which eliminates this entry barrier.

But handicap of self-consumption and small installations is another: access to financing and investment. Large generation parks usually have facilities for obtaining financing through investment fund portfolios. However, self-consumption is outside the objective target of large funds. Likewise, some banking entities only finance facilities that are already in operation. A paradox, since it is in the development phase, when promoters need financial help to launch their projects.

Difficulties in financing solar projects to merchant

Faced with a situation with so much uncertainty in energy prices, fewer and fewer PPAs (Power Purchase Agreements) are being signed. This makes it difficult to finance the solar plants that go to the Merchant, that is, who sell their energy at market price. Most banks and investment funds want to have guaranteed income projection when granting financing for a solar project. To do this, they usually require this PPA from the promoter, in order to know the long-term sale price of energy.

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The reality, in the current context, is that few PPAs are being closed”explains Diana Plané. “On the one hand, in the interest of the promoter, to sell the energy to Merchant and be able to take advantage of the current high prices of electricity; and on the other hand, due to the PPA oftakers, who do not offer prices that are at the current level of the pool, due to the risk of a long-term falleither”.

Alternative financing for solar plants

A solid solution is the new financing alternatives, such as Crowdlending. A medium that democratizes investment and allows promoters access to more flexible financing and less bureaucracy. It is a participatory financing model similar to crowdfunding, a form of crowdfunding from a multitude of investors who contribute small amounts and who, as a whole, add the necessary financing. Thanks to new technologies, there are specialized platforms, such as Flobers.com, which put investors and project promoters in contact and make this financing system viable with lower costs than the traditional bank loan system.

We could affirm that, in the conventional system, it is the bank that obtains benefits. It lends at high interest rates and does not offer attractive returns for time deposits. In many cases, they fail to outpace inflation. What happens when the bank reduces the credit and tightens the conditions? Quite simply, promoters are affected by not being able to access financing. Fortunately, this situation is changing with the advent of mechanisms, such as crowdlending, which democratizes financial models and reduces bank dependency.” concludes the CEO of Flobers, Diana Plané.

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