Financing renewable energy infrastructures via financial citizen participation – The case of Germany

• Private individuals contribute significantly to renewable energy finance in Germany.
• Cooperatives and closed-end funds are of particular importance as business model.
• Citizens are especially committed in the branches of solar and onshore wind energy.

Financing decentralized renewable energy infrastructures in Germany is a complex issue due to the fact that public authorities lack the needed capital and institutional private investors are generally averse to restraints such as high transaction costs and risk-return-concerns. Consequently, alternative financing concepts must be developed to keep the energy transition going. An approach that has recently gained attention in Germany is the concept of financial citizen participation. The concept entails that private individuals contribute to the realization of infrastructure projects by investing in renewable energy projects via various business models and financing concepts.This article illustrates empirical results on the relevance of financial citizen participation within the German renewable energy sector, briefly reviews the technical, political and legal framework that led to the significant development in the field of financial citizen participation and analyzes different business models and citizen participation schemes from Germany with a particular focus on so called energy cooperatives and closed-end funds.