Energy Future

Crowdfunding: How it could save the planet

Anmar Frangoul | Special to

To date, people have used crowdfunding to help albums, books, and even that most British of institutions, a fish and chip restaurant, get off the ground.

But in the energy sector, crowdfunding is increasingly being used as an alternative way to finance renewable energy projects, enabling smaller companies to develop renewable projects with a degree of independence that is not usually seen with bank financing or investment by a large corporation.

The pace of this change is gaining momentum. In the UK, funding site Abundance Generation was launched in 2011, and allows people to invest in renewable energy projects. Since its launch, over 1,000 people have invested more than £5 million ($8.4 million) in 'ethical and sustainable energy projects'.

(Read more: No one and nowhere immune to climate change: UN)

Projects including a commercial scale solar farm in Kent and a wind turbine project in Gloucestershire have benefited from Abundance funds. The amount of money raised for successfully funded projects ranges from £216,000 to £1.4 million.

Meanwhile, in the U.S., the investment platform Mosaic has enabled people to directly invest $5.6 million in, "high quality solar projects."

Florida-based Crowd Energy have developed the Ocean Energy Turbine, which it claims "is the first renewable energy system designed to effectively harness ocean currents on a commercial scale."

(Read more: World's biggest crowdfunding site goes global)

In order to continue their turbine's development by building a second prototype and test tank, followed by 'open ocean' testing with the aid of Florida Atlantic University, they have set up a Kickstarter page with the goal of raising $75,000.

"Three or four years ago, we wouldn't have been looking for funding through this route, we would have done it out of our own pockets," Phillip Janca, of Crowd Energy, told in a phone interview.

Shannon Stent | E+ | Getty Images

The financial crisis has meant that banks and investors are more likely to invest in low-risk projects, and for Janca, one advantage of financing the project through crowdfunding is the independence from larger energy companies it offers.

(Read more: Europe's greenest and cleanest cities)

"They want to be seen to be environmentally conscious, and so would probably give us some development funds," Janca said. "But when they have control of the project… bringing it to completion and fruition is going to be a very difficult thing because it's in direct competition with what they do," he added.

Janca has big ambitions. "The Bureau of Ocean Energy Management says that if we can capture 1/1000th of the energy in the Gulf Stream, we could supply Florida with 35% of its electricity," Janca said.

"The bottom line is that we want to become a company that builds our own power generation equipment and then employs it in the ocean to harvest electricity," Janca added. Come 2015, Crowd Energy hope to have four 'production scale' turbines up and running, and feeding the grid.

So far, they have raised over $15,000 of their target. Will they achieve their goal? "It remains to be seen, but we are positive about it," Janca said. "We envision the old proverbial hour glass being turned upside down and there's a limited amount of time before global warming takes over – it's a bit of a race."

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