Jan. 7 (Bloomberg) — Solar Mosaic Inc., which operates an
online service that lets individuals fund solar projects, said
investors can earn a 4.5 percent return on rooftop power plants,
better than 10-year Treasuries that currently yield about
1.9 percent.
The company introduced its service today. In initial tests,
the website has facilitated about $1.1 million in investments
from 400 people to finance 12 rooftop solar plants in
California, New Jersey and Arizona, Solar Mosaic said today in a
statement.
The closely held company is developing a new model to
finance renewable energy. Its so-called crowdfunding service
relies on individuals instead of banks or institutional
investors, and offers one of the first mechanisms for consumers
to back solar power assets, according to Oakland, California-
based Solar Mosaic’s President Billy Parish.
“Through our online marketplace, investors can take part
in high quality clean energy projects for as little as $25, and
earn a return that is better than most other investment products
available to the general public,” Parish said today on a
conference call.
The cost of solar power has dropped 80 percent in the last
five years, making it comparable to power derived from fossil
fuels, or cheaper, Parish said. Financing costs remain an
impediment to wider use of solar panels.
“To rapidly deploy clean energy, the industry needs access
to low cost capital and lots of it,” Parish said. “We are able
to source capital from the crowd and lend that capital to clean-
energy developers at lower interest rates than they would get
from banks,” he said.
Online Funding
Solar Mosaic lists projects through its online marketplace.
Investors provide capital that’s used to buy and install rooftop
solar panels. When the systems are complete and selling
electricity, typically to building owners or occupants, the
backers are repaid with interest.
The company provides capital to developers at about 5.5
percent. It collects a 1 percent fee and pays investors about
4.5 percent.
The company’s first projects are on affordable housing
facilities in California and are being offered to investors in
New York and California, according to the statement. They can
expect to be repaid in full within about nine years.
Solar Mosaic has raised $3.4 million from investors
including Spring Ventures Ltd. and Serious Change LP. It also
has received a $2 million grant from the U.S. Energy Department.
To contact the reporter on this story:
Andrew Herndon in San Francisco at
aherndon2@bloomberg.net
To contact the editor responsible for this story:
Will Wade at
wwade4@bloomberg.net
