Empowering communities through citizen finance

How can local communities unlock the funding needed to move from climate ambition to concrete action? 

This question was at the heart of a recent webinar organised by the Citizen-led Renovation initiative together with the EU Covenant of Mayors, focusing on citizen finance and crowdfunding as tools to support clean energy and renovation projects.

What clearly emerged is that traditional funding models are no longer sufficient. Cities and regions are under growing pressure to deliver on energy transition, climate adaptation and building renovation, often with limited budgets and a strong dependence on public grants. At the same time, many projects are still developed in isolation, with citizens involved too late in the process. 

Citizen finance offers a different approach. It connects funding, participation and ownership from the outset. Rather than being passive beneficiaries, citizens become directly involved (financially, but also socially) in shaping local projects.

Making citizen investment work in practice

The contribution from REGEA, the North-West Croatia Energy and Climate Agency and a Phase III enabler of the Citizen-led Renovation initiative, grounded this discussion in practical experience. Their message was simple: crowdfunding is not just about raising money, it is a tool for engagement, validation and community-building.

In their work, crowdfunding has proven particularly relevant for small- to medium-scale projects, where it can help mobilise local capital while building trust early on. What matters is not only the financial outcome, but the process itself. Campaigns require careful preparation: defining a clear project, identifying the target audience, building a communication strategy, and creating incentives that resonate with people. 

REGEA also highlighted what motivates citizens to participate. Financial returns play a role, but they are only part of the picture. People are equally driven by the desire to contribute to a local project, to be part of a collective effort, and to see tangible benefits in their community, whether that means lower energy bills, shared ownership of infrastructure, or a stronger sense of belonging. 

Several concrete examples illustrated this. In one case, a Croatian school used crowdfunding to finance energy efficiency improvements and solar panels, with the long-term goal of becoming energy independent. In another, a kindergarten renovation combined public funding with citizen contributions, resulting not only in a fully funded project but also in strong local engagement. 

These experiences show that citizen finance works best when it is embedded in a broader vision, one that links projects, people and long-term local benefits.

Strengthening the ecosystem around citizen projects

A complementary perspective came from AURA-EE, the Auvergne-Rhône Alpes Energy and Environment Agency, also a Phase III enabler of the Citizen-led Renovation initiative. Rather than focusing on individual projects, their intervention explored the wider ecosystem needed to support and sustain citizen-led initiatives over time.

Their experience shows that these projects depend on strong support structures. Through regional networks that already accompany hundreds of energy communities in France, AURA-EE helps build skills, provide guidance and connect local authorities, project leaders and citizens. 

One example presented was the Dwatts cooperative in the Drôme Valley, which brings together citizens, municipalities and businesses to invest in renewable energy projects. Since its creation, it has mobilised significant local investment and developed a wide range of initiatives, from solar installations to district heating. What stands out in this model is its governance: citizens are not just investors, but active participants in decision-making, through assemblies and working groups. 

AURA-EE also underlined that these initiatives evolve over time. What often begins with renewable energy production can expand into other areas, including building renovation. Supporting this evolution requires new tools, continued coordination and long-term engagement from all actors involved.

From isolated initiatives to structured models

Taken together, the presentations highlight how citizen-led renovation is evolving. What used to be seen as a niche or experimental approach is becoming more structured, supported by clearer methodologies, stronger networks and a growing body of experience.

There is also a sense that the timing is right. Regulatory frameworks are increasingly supportive, digital platforms have lowered the barriers to participation and rising energy costs have made citizens more aware of the value of local energy solutions. Even relatively small investments, sometimes as low as a few hundred euros, can now enable meaningful participation. 

At the same time, challenges remain. Access to finance, regulatory complexity and limited awareness continue to slow down the uptake of these models. Scaling up will require not only successful projects but also stronger coordination and long-term support.

Towards a more participatory energy system

What the webinar ultimately showed is that citizen finance is not just an alternative funding mechanism. It reflects a deeper transformation in how the energy transition is organised.

By combining financial participation with local engagement, it opens the door to a more inclusive and resilient model, one where citizens are not only consulted but actively involved in shaping and investing in the future of their communities.

Explore the discussion in more depth & watch the full webinar here.