A workshop was held in the IFSC on December 8th 2016, looking at financial incentives to promote citizen investment in renewable energy. The workshop was organised by Dr. Celine McInerney, Cork University Business School, and Joseph Curtin, UCC. It was funded by the EPA Research programme.

1. Financial Incentives to Promote
Citizen Investment in
Renewables
Joseph Curtin, UCC
Thursday 8th December
Funded by:

2. 1. (Very) short history of Irish renewable energy
development
2. The case for (and against) citizen investment
3. The use of financial incentives and “typical
models” in four jurisdictions: Germany; the UK;
Denmark & Ontario
4. Future work
5. Conclusions and policy implications
Overview

3. A short history of Ireland’s Energy transition (wind)
SEAI, 2003

4. 208 Farms
2532 MW
IWEA (2016)
A short history of Ireland’s Energy transition (wind)

5. A short history of Ireland’s Energy transition

6. Two views on promoting citizen investment
1. Will unlock the next phase of Irish
decarbonisation by building social “buy-in”
• Generates local income and
regional development
• More locally appropriate
developments, more likely to
receive planning
• Contribute to understanding of
climate issues
• Dispose citizens to making
future low-carbon investments
2. It’s not possible in the Irish context
• Increases costs of developing
projects
• Burden on project developers
(slows down projects, fiduciary
and regulator responsibility)
• Irish citizens are too risk averse
• Wind projects in pipeline to
2020 have grid
connections/approvals

7. Proportion of total electricity
generation (%, 2014)
Local Ownership
Renewabl
es
Wind Solar PV
Germany 25.8 9 5.0 Over half of total investment in wind and
solar has come from citizen investors
Denmark 53 40.5 .2 Over half of total wind investment from
local citizen investors
UK 19.1 9.5 .6 Low levels of community and citizen
ownership, though increasingly since
2000 and especially since 2009
Ontario 28.7 4.4 Less than
.1
Low levels of community and citizen
ownership, though increasingly rapidly
since 2009
Four Case Studies
*
*Ontario
How? financial incentives How? Focused on Models of Participation

8. Timeline
1980s
1990s
2000s
2010s
FiT for wind &
income eligible for
tax rebate (1992)
Very
high
energy
and
carbon
taxes
FIP (2003)
Grants: 30% of wind turbine (1979)
Mandated equity offer
to local citizens (2009)
Guarantee scheme for loans for
feasibility studies (up to
€70,000) (2009)
DevelopmentFeasibility OperationConstruction
Increased FIP (2009)

9. DevelopmentFeasibility OperationConstruction
Timeline
1990s
2000s
2010s
Undifferentiated FiT
& significant tax
advantages from
resultant income
Pilot soft loans
& grants programme for
Solar PV
Expanded soft loans (2%)
programme for PV
Technology and size-
specific FIT
Tender scheme for
large projects
All soft loan programmes
consolidated: up to 100% of
Investment costs
State/Regional-level programmes
Local organizations & citizen
associations encouraging
energy communities

10. Timeline
1990s
2000s
2010s FiT for smaller projects
under 5/10MW
Contract for Difference
Non Fossil Fuel Obligation
Grant for feasibility
studies (up to
€26,000)
Renewables ObligationGrant support (CRI)
Grant support: low carbon
community challenge
Grant for pre-planning
development work
(up to €26,000)
30-50% tax relief to investors in new companies,
early stage startups and social enterprises (ended
2015)
Voluntary equity offer
DevelopmentFeasibility OperationConstruction

11. OntarioTimeline
2000s
2010s
FiT: Technology and size
differentiated + ADDER
Energy Partnership Program:
grant funding and finance to
cover planning applications
and other studies (covering
legal, technical, financial and
due diligence and soft costs)
Tax exemption for
Aboriginal communities
DevelopmentFeasibility OperationConstruction
Energy Partnership
Program: Grant funding
and access to finance to
cover feasibility
assessments
2011: 25/25MW set aside
2014: competitive tendering
process with local ownership as
important criteria
*
*

12. Typical models
Smaller Projects (often solar) Larger Projects (often wind)
Co-ops for solar PV and some smaller
wind
Limited partnerships (GmbH and Co. KG
structure) for many wind*
Denmark For-profit guild structure with co-op-like decision-making for majority of fully community-
owned and shared ownership (wind) projects
The UK No typical model evident: Community
benefit societies, charities, co-ops all used
No typical model evident: a variety of co-
ownership models emerging
Ontario For profit energy co-ops for solar PV (one
wind)
JV between aboriginal community groups and
professional developers (wind)
Impact of financial incentive on typical model is evident. e.g:
• Germany tax treatment of profit
• Ontario FiT legislation
*Not necessarily “local” investors

13. Future Work
Cast Study paper:
under review at
Journal of Cleaner
Production

14. Conclusions: Specific
• Incentives required at all stages of project development to
overcome discrete barriers for citizen and communities
• Grants and access to (soft) finance at Feasibility and Development
(+ access to trusted intermediary)
• Operation stage: While FITs have been correlated to high levels of
community investment in many cases, not instrument choice but
designed characteristics which are most important
• Tender/quota-based schemes can be designed with communities in
mind (Ontario, Quebec, not UK)
• Tax efficient treatment of profits is an important consideration

15. Conclusions: General
• Promoting citizen/community involvement in renewable
projects is possible in Ireland
• But very challenging as these investors are different:
requires long-term and persistent policy focus
• Useful to promote typical models/vehicles through design
of financial incentives
• Cost: we can’t afford to do this V we can’t afford not to do
this?
• Speed of deployment: faster or slower decarbonisation?
• Alienated citizenry, populism: get rural and marginal
communities “invested”