We can fund the development of capital works by borrowing money, or we can Crowd Fund it. Crowd Funding removes the cost of interest and will always be a lower cost than loans.
Let us assume we wish to build a renewable energy plant that will produce energy that we can sell for ten cents per kWh. Let us assume that the cost of constructing a plant that produces on average one kW continuously is $10000 and will generate electricity at no extra cost for 20 years.
In 20 years the total value of the power produced is $17520 or a profit of $7520.
Assume we can fund the capital cost of a loan at 5% repaid each year from the income from the electricity. The total cost of the loan is $16,048 leaving an excess of $1,471.
Instead of borrowing money let us borrow the money from the Crowd or Customer. Instead of paying back the loan plus interest lets give the Customer a Discount on the electricity they purchase. In other words, let us give back more energy at a lower price. There are various ways to do this. The only requirement is to make sure we can cover the operating costs of producing electricity and produce enough electricity to pay off the loan. One way to do it is to pre-purchase electricity and buy Rewards. The Reward is a discount coupon that pays for electricity at a discount depending on how long before redeemed. The value of the discount is independent of the price of money because we do not pay interest on the Funds from the Crowd. We give a return with more electricity.
Using this approach the Crowd, who want renewable energy, can purchase Rewards from suppliers who can build renewable energy plants or roof-top systems and batteries. If the Rewards discount is high enough then, the Crowd can borrow money at a lower rate but secured against Rewards. Rewards are transferable so a buyer can sell some to pay off their loans.
Using this approach, we can fund the development of enough renewable energy to replace coal, gas and oil-fired plants as fast as we can build them – and they do not have to be “economically efficient”.