The Berkeley-based start-up Solar Mosaic offers a promising new model for clean energy finance.
The upfront costs and logistical challenges of installation have prevented solar panels from blanketing American rooftops. But that could change: a start-up called Solar Mosaic aims to make distributed solar affordable for buildings and businesses, through a crowd-funding platform that resembles KickStarter and Kiva. Unlike those companies, however, Solar Mosaic may soon offer returns on investments, and transform clean energy funding.
Solar Mosaic’s model is simple: the company helps groups whose missions it supports, such as homeless shelters, lease solar panels for their roofs using donations from online givers. The recipient later pays back donors with its energy savings.
Since its inception in 2010, the Berkeley, California-based start-up has provided panels for five buildings in California and Arizona, generated 73kW of energy, and saved recipients a total of $600,000. While the company has focused on helping mission-driven organisations, Lisa Curtis, Solar Mosaic’s Community Builder, says that it hopes to “expand into financing other types of projects, such as schools, commercial buildings, and residential sites”, as well as developing projects in other states. The company recently received a combined $4.5 million from the Department of Energy and the venture capital group Spring Ventures to scale up its operations.
Solar Mosaic has so far been barred from offering returns to its online donors by Securities and Exchange Commission (SEC) regulations that prevent non-accredited investors from receiving interest. In April, however, President Obama passed the Jumpstart Our Business Startups (JOBS) Act, a law that, among its other provisions, permits companies in the US to sell securities to small-scale investors. While Solar Mosaic is in a mandatory quiet period as it negotiates with the SEC, founder Billy Parish has stated that the company expects to offer returns of 5-10% on Solar Power Notes in coming months.
According to Bloomberg New Energy Finance analyst Nathaniel Bullard, Solar Mosaic is developing a promising instrument. “Putting your money into a physical project is more exciting, and less exotic, than giving it to an investment bank”, he says. “Secondary markets are likely to emerge, which is when it will really take off.” As investors realise that solar is stable and profitable, Bullard expects crowd-funding to gather “billions of dollars … facilitating solar installations in states across the country”. – Ben Goldfarb
Photo: Mosaic, www.solarmosaic.com