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Peer-to-peer financing mechanisms to accelerate renewable energy deployment

Author

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  • K. Branker
  • E. Shackles
  • J. M. Pearce

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) programmes have been used successfully in many countries to make RETs more economically feasible. Unfortunately, the large capital costs of RETs can result both in the slow uptake of FIT programmes 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 article critically analyses and considers the political, financial and logistical risks of an innovative peer-to-peer (P2P) financing mechanism. This mechanism has the goal of increasing RET deployment capacity under an FIT programme in an effort to equitably distribute both the environmental and economic advantages throughout the entire population. Using the Ontario FIT programme as a case study, this article illustrates how the guaranteed income stream from a solar photovoltaic system can be modelled as an investment and how P2P 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

  • 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.
    • Handle: RePEc:taf:jsustf:v:1:y:2011:i:2:p:138-155
    DOI: 10.1080/20430795.2011.582325
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    Citations

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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. 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.
    4. 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.
    5. 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.
    6. Dinesh, Harshavardhan & Pearce, Joshua M., 2016. "The potential of agrivoltaic systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 299-308.
    7. 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.
    8. Pradeep Kumar Dadabada, 2025. "Analyzing the Impact of ESG Integration and FinTech Innovations on Green Finance: A Comparative Case Studies Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(2), pages 7959-7978, June.
    9. 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.
    10. 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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