In the new age of austerity, communities are coming together to finance and run their own projects and services.
Loren Berlin | December 2011 Issue
With reporting by Karin Wesselink in Beneden-Leeuwen, the Netherlands
The organic therapeutic farm Henricus Hoeve in the Dutch town of Beneden-Leeuwen was already climate neutral, but Henk Hoefnagel wanted to do more with the solar panels on his barn. Now those 1,600 square feet (150 square meters) of solar panels deliver electricity to six households elsewhere in the Netherlands. Hoefnagel found six investors who each bought a share in the solar panels for $6,600. Their investment buys them green energy for the next 25 years. Right now, that costs 33 cents per kilowatt-hour (kWh), already a savings of 17 cents per kwh. Hoefnagel produces half the number of kilowatts his business consumes. It fits his corporate philosophy, he says, “of creating closed cycles wherever possible: the things I need, I make myself.” Hoefnagel is happy; his investors are happy.
This cross-pollination between producers and consumers—named Energy from FarmerSEEKSneighbor—is the brainchild of Anne Stijkel, a creator of innovative concepts in sustainability. Decentralization is the motto for her projects. “Citizens and companies can work together just fine,” she says. “You can do a lot more at a local level if the government facilitates the playing field instead of dictating the rules of the game, as they do now.”
Legislation is a stumbling block for her new project. The law states that the solar-panel investors must pay energy tax; after all, the panels are not mounted on their own roofs, but on those of the farmers. Energy company Greenchoice is swallowing FarmerSEEKSneighbor’s fiscal risk at the moment; according to Stijkel, other major energy companies have not been eager to join the ranks.
The new project is a spinoff of FarmerSEEKSneighbor for Solar Panels: not the title of a dating show, but an initiative to stimulate green energy. Participating farmers such as Hoefnagel look for “neighbors” to finance $55,000 solar panels on their farms or barns. Investors pay $550 to the farmer of their choice and receive six coupons worth $110 in return, which they redeem once a year for organic farm products. A handful of farmers have collected the hundred “neighbors” they need.
To stimulate sustainable energy further, Stijkel submitted a project proposal to the Dutch Ministry of Infrastructure and the Environment last year. She was looking for support for room to experiment with self-delivery of green energy without having to pay energy tax. That idea was shot down, a decision that still infuriates her. “Anyone with a lick of horse sense knows these kinds of initiatives are the wave of the future,” she says. But Stijkel hasn’t given up. “So many roofs are out there doing nothing,” she says cheerfully. “I’m already imagining variations like SchoolANDneighbor or HospitalANDneighbor.”
Those variations are popping up everywhere, examples of a growing trend toward creative, community-based financing. In the current age of austerity, as banks continue to tighten underwriting standards, making credit more difficult to access, many communities are sidestepping financial institutions. Compounding the need for alternative financing are the struggling federal, state and local agencies that are cutting budgets in response to the economic crisis. As government agencies trim spending, communities are pushed further toward self-reliance for certain services.
In response, these communities are joining forces and pooling resources to finance projects and achieve shared goals, sometimes with their own funds, sometimes in conjunction with government assistance. “Groups have gotten more and more creative about cobbling together available funding streams and even more creative in the current economic crunch,” says John Kretzmann, co-director of the Asset-Based Community Development Institute at Northwestern University in Chicago. Greenchoice and similar initiatives demonstrate the impact an empowered, determined citizenry can have on a community—and serve as models for individuals looking to affect change in their corners of the world.
In some instances, communities are organizing to access state funds that have been set aside for community improvement but have until now only been available to elected leaders. In the Netherlands, for example, a national organization for community development called Landelijk Samenwerkingsverband Aandachtswijken (LSA), a Utrecht-based association of community groups, works with local organizations around the country to facilitate community-led neighborhood development. “The government set aside 95 million euros [$135 million] for 40 neighborhoods for a period of four years,” says Henk Cornelissen, director of LSA. “But the local council decides what is best for these neighborhoods. They say ‘yes’ or ‘no’ to projects.”
To give community residents more control over how the funds are spent, LSA created a voucher program whereby residents propose projects to a committee composed of community members. The committee decides which projects to approve and provides those projects with a voucher that residents can take to the government to cash in for funding. The committee then follows up to ensure the funds have been used correctly.
According to Cornelissen, the neighborhoods usually propose “small activities,” often related to sports or homework tutorials for children. They also often suggest festivals and markets and other lively events that bring people together. “Most of these areas can get a 300,000 euro [$430,000] budget for the year, which is quite substantial,” explains Cornelissen.
Whereas LSA’s voucher program relies entirely on public funds, Scotland has created Initiative at the Edge, a partnership model that provides public funds to the country’s most remote and impoverished areas while requiring the selected communities to assist in financing the projects with cash or sweat equity. In 2004, one of those areas identified for financing was the Caithness Highlands in northern Scotland, a region of 220 square miles (570 square kilometers) with 1,800 residents, mainly lobster fishermen, small-scale farmers and public workers, scattered throughout a handful of villages.