THE POTENTIAL OF CROWD-FINANCING FOR SOLAR PHOTOVOLTAICS DEVELOPMENT IN SINGAPORE

Abstract

Solar installation has been one of the mega trends for the past decade, with numerous attempts of converting the use of non-renewable energy sources into renewable ones. Due to the high cost needed for solar installations, new investment models and funding options have emerged in recent years. While solar financing have been a popular topic for research, little have been done to explore the territories of Solar Crowdfunding (SCF). Since crowdfunding taps on investments from the masses, it should hold great potential in being able to generate the funds needed for solar projects. However, due to its novelty, not many known projects have adopted SCF as a form of financing. Hence, this study sets out to determine whether SCF does indeed have potential as an alternative solar financing method. This paper presents a system dynamics approach which provided an amalgamation of a three-stage SCF development including the determination of potential SCF adopters, factors affecting the adoption of SCF, and factors affecting the success of SCF. Each stage provided various factors that would positively or negatively affect the SCF market. Hence, producing a system dynamics model that has the ability to simulate the potential of SCF and determine how much funds solar crowdfunding can generate in a given period. The model was simulated in Vensim PLE software with data collected from the Singapore context to simulate the 35-year potential of SCF in Singapore. The simulation revealed that at the end of 35 years, SCF can potentially generate a cumulative amount of S$240.9 million based on a projected cost reduction of solar installation over the years. This is 3.25% of the total cumulative funds needed for solar installations expected in year 2050. This study would provide an in-depth understanding on various factors that affects the SCF market, a projection of SCF potentials in the Singapore context, and a system dynamics model that would provide policy makers with knowledge of the SCF market to help in phase in policies that would incentivise and update current SCF regulations.