Financing a Local Energy Community (LEG) often requires significant investments – whether for solar panels, smart meters, or infrastructure. Fortunately, there are numerous financing models in Switzerland that make LEG establishment and expansion possible.
In this comprehensive guide, you'll learn everything about the various financing options for LEGs – from crowdfunding through cooperative shares to bank loans.
Overview: Financing Needs for LEGs
Typical Investment Costs
Establishment Costs:
- Legal advice: 1,000-3,000 CHF
- Registrations: 500-1,500 CHF
- Technical planning: 500-2,000 CHF
- Total: 2,000-6,500 CHF
Infrastructure Costs:
- Smart meters (per participant): 200-600 CHF
- Digital platform: 50-200 CHF/month
- Installations: 1,000-5,000 CHF
- Total: 2,000-10,000 CHF (one-time)
Energy Facilities (optional):
- Solar panel (10 kWp): 10,000-15,000 CHF
- Battery storage (10 kWh): 8,000-12,000 CHF
- Total: 18,000-27,000 CHF
Financing Model 1: Membership Fees
How It Works
One-Time Contributions:
- Membership fee: 0-500 CHF per member
- Cooperative shares: 100-1,000 CHF per share
- Investment contribution: Variable amount
Ongoing Contributions:
- Monthly membership fee: 5-20 CHF
- Operating contribution: 10-50 CHF/month
- Variable contributions as needed
Advantages
- ✅ Easy to implement
- ✅ Direct member participation
- ✅ No interest
- ✅ No debt
Disadvantages
- ⚠️ Limited financing amount
- ⚠️ Dependent on number of members
- ⚠️ Can deter participation
Financing Model 2: Cooperative Shares
How It Works
Basic Principle:
- Members purchase cooperative shares
- Shares give voting rights
- Typically 100-1,000 CHF per share
- Refundable upon exit
Example:
- 50 members × 500 CHF share = 25,000 CHF capital
- Sufficient for establishment and initial investments
Advantages
- ✅ Democratic participation
- ✅ No interest
- ✅ Long-term capital
- ✅ Possible tax advantages
Disadvantages
- ⚠️ Limited liquidity
- ⚠️ More complex legal form
- ⚠️ Liability risks
Financing Model 3: Crowdfunding
How It Works
Platform-Based:
- Campaign on crowdfunding platform
- Set target amount (e.g., 20,000 CHF)
- Supporters can contribute
- Various rewards possible
Typical Platforms:
- Wemakeit (Switzerland)
- Kickstarter
- Local platforms
Advantages
- ✅ Broad public reach
- ✅ Marketing effect
- ✅ No interest (for donations)
- ✅ Community building
Disadvantages
- ⚠️ Success not guaranteed
- ⚠️ Effort for campaign
- ⚠️ Fees (5-10%)
- ⚠️ Public pressure
Financing Model 4: Bank Loans
How It Works
Credit Types:
- Investment loan: For facilities (5-15 years)
- Operating loan: For ongoing costs (1-5 years)
- Mortgage loan: For real estate (10-30 years)
Typical Terms:
- Interest rate: 2-4% p.a. (2025)
- Term: 5-15 years
- Collateral: Often required
- Repayment: Monthly/annually
Advantages
- ✅ High financing amount possible
- ✅ Professional structure
- ✅ Predictable costs
- ✅ Quick availability
Disadvantages
- ⚠️ Interest costs
- ⚠️ Collateral required
- ⚠️ Repayment obligation
- ⚠️ Credit check
Financing Model 5: Grants and Subsidies
Overview
Federal Grants:
- One-time payment photovoltaics: 200-300 CHF/kWp
- Investment contributions: Up to 30% of costs
- Maximum 50,000 CHF per project
Cantonal Grants:
- 10-30% of investment costs
- Maximum 5,000-15,000 CHF
- Regional differences
Municipal Grants:
- 1,000-5,000 CHF
- Often for local projects
- Support of energy strategy
Combined Financing Models
Best Practice: Use Multiple Sources
Example Combination:
- Membership fees: 10,000 CHF (20%)
- Cooperative shares: 20,000 CHF (40%)
- Grants: 15,000 CHF (30%)
- Bank loan: 5,000 CHF (10%)
- Total: 50,000 CHF
Frequently Asked Questions (FAQ)
Which financing model is best?
Depends on:
- Project size
- Available equity
- Legal form
- Timeline
Often: Combination of multiple models.
How much equity do I need?
Typically:
- At least 20-30% equity
- Rest through financing
- Dependent on project size
What interest rates must I pay?
Currently (2025):
- Bank loans: 2-4% p.a.
- Eco-loans: Often cheaper
- Cooperative shares: No interest
Next Steps
Ready to finance your LEG?
- Calculate costs: Determine needs
- Evaluate models: Check options
- Check grants: Use available grants
- Contact Upgrid: Get advice
Related Articles:
- LEG Cost-Benefit Analysis: How Much Can You Save?
- Subsidies and Grants for LEG in Switzerland 2025
- Starting an LEG: Step-by-Step Guide with Checklist
- Energy Pricing in LEG: Transparent Billing Explained
About Upgrid: Upgrid supports you throughout financing planning for LEG projects. Visit Upgrid.ch for more information.