Crowdfunded Solar Is Here
Looking for a way to support the spread of solar power and earn a good return on your investment while doing so? If you live in California or New York, your moment has arrived, as Oakland, California-based Mosaic has opened its first projects to general investment. I wrote about this innovative organization in my story on community solar power, "Solar for All," in the current issue of Sierra:
Mosaic crowd-funds solar projects, enabling people to invest directly in small to midsize solar projects while earning annual returns of 4 to 8 percent.
Financing is a major hurdle for community-scale solar. Very few banks finance solar projects, and those that do favor big ones—either utility-scale solar operations or solar-leasing companies that front thousands of rooftop projects. When it comes to serving the needs of Oakland's Asian Resource Center or St. Vincent de Paul Society, or the Murdoch Community Center in Flagstaff, Arizona, it's not worth the banks' time to do the risk analysis involved.
Enter Mosaic. In the case of St. Vincent de Paul, it rounded up 80 supporters who kicked in a total of $88,000 to finance 26 kilowatts of solar panels to power the organization's kitchen, where volunteers prepare a thousand meals a day for Oakland's homeless and indigent. All those walk-in freezers and refrigerators require a lot of electricity, says St. Vincent executive director Philip Arca. The solar panels are saving about $1,200 a month, he says, adding, "We want to get as much assistance to people as possible, so for us every dollar counts."
At the time of that writing, Mosaic was waiting for approval from the Securities Exchange Commission for its crowdfunding business model, and had to limit its offerings to small numbers of "non-accredited" (i.e., non-professional) investors. While a decision from the SEC is still awaited, Mosaic has obtained permission from regulators to offer investments to anyone in California and New York--the states where it has offices--who is willing to invest $25 or more. "As a nimble, online maketplace, we're able to source capital from the crowd and lend it to clean energy developers at lower rate than they could get from banks," said Mosaic founder Billy Parish in a morning conference call. "And we're able to offer it at a rate of return better than most other investment products available to the general public."
Mosaic's initial projects--solar arrays atop three affordable housing projects in California--offer a 4.5 percent annual rate of return for a term of about 9 years. Investments can be made online, in an easy process that only takes minutes. Mosaic hopes to offer future projects to investors in other states soon, with rates of return expected to range from 4 to 8 percent. As communtiy solar guru John Farrell of the Institute of Local Self-Reliance in Minneapolis notes, a working crowdfunding model could change the face of solar power in the United State. "If it becomes relatively inexpensive to raise capital for community-based projects," he says, "that really blows the door down."
Photo: Mosaic staff and investors with an early project, an 8.6-kilowatt project atop Oakland's People's Grocery. Courtesy of Mosaic.