Towards a Definition of a Consumer Stock Ownership Plan (CSOP)

A CSOP (Consumer Stock Ownership Plan) enables consumers – especially those without savings or access to capital credit – to acquire an ownership stake in a utility they use and thus to become “prosumers”:

• It is a consumer-centred investment model for general services providing participation both financially and in regards to management decisions.
• Avoiding personal liability of the consumer-shareholders, a CSOP permits co-investments of municipalities, small and medium sized enterprises (SMEs) and other local stakeholders.
• An intermediary entity (CSOP-Ltd.) invests into a new or existing RE plant and operates it on behalf of different actors as co-owners.

With the help of a CSOP, investments can be made into any kind of utility, for example water, energy, transportation and the like. When investing in renewable energy installations, CSOPs contribute to the energy transition and climate change mitigation by facilitating local, decentralised production.

See also our explanatory animated Video - CSOPs Capital at Work - here.

The main aims of a CSOP are to:

• enable consumers/households to become (co-)owners of the utilities that supply them and thus to benefit from the profits and actively participate in decision-making
• pool the investment and voting rights of consumers in regards to other public or private co-investors
• offer advice, consultation and fair representation of consumers’ interests in multi-stakeholder projects

The properties of a CSOP compared to conventional citizen participation models are:

• access to capital credit by pooling individual investments in an intermediary entity using leverage to scale up the investment
• repayment of the acquisition loan by future profits from the sale of excess energy production; once the loan is repaid, profits are distributed amongst the co-owners.

As a consequence, an investment carried through a CSOP has the advantage of being

• Scalable and thus more competitive: it can use the best and most advanced technology which guarantees cost-efficient production.
• Profitable: by benefiting from economies of scale, unit production cost decreases with increasing capacity while at the same time providing sufficient excess production to sell to third parties or the grid. Like this, the amortisation period of the investment is reduced.
• Low-threshold: as installation and shares are pledged as security for a bank loan repaid from future profits, consumer participation does not require substantial assets or savings.
• Mainstream: a CSOP is based on proven legal concepts/vehicles and compatible with existing legal and financial requirements. In particular, it complies with future European requirements concerning local renewable energy communities.
• Compatible with energy efficiency measures: a CSOP can also combine investment in a production facility with measures like retrofitting that reduce energy consumption. With less consumption, more energy can be sold, so that amortisation is accelerated