Crowd investing platform Trine lets people invest small amounts of money in solar energy systems for off-grid communities. Successful projects mean a return on your investment, and people around the world gaining access to clean electricity.
An estimated 1.2 billion people around the world are still living without access to electricity. As well as making it difficult for agriculture and businesses to be optimally developed, it negatively impacts education too, with some everyday tasks taking so much more time to carry out without the help of electrical machinery, and no lights after nightfall meaning no more time for learning either. The little energy that is generated in off-grid areas is often damaging to human health, as people resort to using diesel generators or burning wood or dung. The people most affected by this are in Sub-Saharan Africa and South Asia.
The Swedish social business Trine has come up with a neat way of tackling the issue: a crowd investing concept that allows people from all walks of life and all kinds of budgets to invest in solar projects in off-grid communities. Unlike crowdfunding, the project is support by investors rather than donors, meaning that when a planned project is implemented successfully, the investor receives their money back, plus a return on their investment. The return is usually around five to six per cent over a duration of one to two years, although in some cases it can take much longer for the money to be paid back.
Replacing Fossil Fuels With Solar Energy
Collaborating with a project partner on the ground, Trine mostly arranges for home solar systems to be installed, meaning a solar panel is installed on the roof of the house, and the inhabitants receive a pack including a battery, a number of lamps and an adapter that lets them charge mobile phones. The users inside the house pay for the electricity that they now have access to - which as well as being cleaner, is also significantly cheaper than other power generation options, such as burning diesel - and this money allows the local partner company to pay back the sum invested, along with a return on the investment.
A first pilot project showed Trine that in participating families, 180% more girls were able to go to school and the use of fuels such as diesel were reduced by 72 per cent. At the time of writing, the platform had financed 14 projects and provided almost 130,000 people with electricity.
The Risks and Rewards of Socially Conscious Investing
It's possible to become an investor with a minimum contribution of just 25 EUR, but the risks involved in any investment shouldn't be underestimated. All of Trine's projects come with a risk assessment that is based on the expected profit margin, liquidity and financial solvency of the project partner and the financial strength of the end consumer. The risk is given a grade of A to D, with A being the best (i.e. most secure).
Investing in emerging markets are more risky in general too, due to factors such as political and economic instability. And with the end customers paying their bills in local currency, fluctuations in the exchange rate can also make it difficult for investments to be paid back.
But despite all that, Trine's crowd investing concept is certainly an interesting alternative to just donating to a cause that you believe in. Not only can you see your hard-earned cash go to a project that's both socially and environmentally sustainable, but the crowd aspect also means that you're able to put down small amounts rather than one big sum all in one go - so if, for whatever reason, things don't go as planned - you're willing and able to take the hit.
This article is a translation by Marisa Pettit of the original which originally appeared on RESET's German-language site.