Due to a number of reasons, including the Federal Tax Credit, solar photovoltaic installations have been funded in a variety of innovative ways in the U.S. That innovation is set to enter a new chapter today, as Solar Mosaic opens its solar crowdfunding model to investors in New York and California and accredited investors throughout the country.
In a key development, this is the first time investors will be able to make micro investments in a solar array on a "for profit" basis. Solar Mosaic is committed to delivery a 4.5% annual return on investments into the installations it is planning. This, Mosaic notes, is better than Treasuries, bonds and the performance of average S&P 500 stocks in the past decade.
Previous Mosaic installations, which were rolled out in a "proof of concept phase", have delivered returns in this order, including an installation on the Youth Employment Partnership building in Oakland, which delivered a yield to investors of 6.38% annually. Investors received the funds in October 2011.
pv magazine has been following the solar startup since 2011, and visited the company in July last year. In that time Solar Mosaic has picked up additional VC funding to pursue its crowdfunded solar model and also picked up U.S. Department of Energy SunShot funding worth US$2 million.
The premise behind Solar Mosaics model, is that investors can make small contributions towards a rooftop solar array. As the array supplies electricity to the building’s occupants, the money charged for the electricity is collected for the eventual repayment of investors, including the 4.5% yield. It has been called "solar for renters" as it plans to attract people interested in investing in a solar array, who do not have a suitable rooftop space or are living in rental accommodation.
The first installations Mosaic is opening investment on are projects on affordable housing apartments in California, with the 4.5% annual yield over nine years.
"Energy investing has traditionally been a bank only game, but already, hundreds of people from across the United States have invested to finance solar projects through Mosaic. We expect millions more to follow," said Dan Rosen, Mosaics CEO, in a statement. Mosaic claim US$1.1 million has been invested through the site, by around 400 investors.
"The transition to clean energy represents one of the greatest opportunities for wealth creation of our time. We created Mosaic to accelerate that transition by enabling more people to participate in it and to profit from it," said Mosaics President Billy Parish.
The Solar Mosaic model is very similar to the crowdfunding model employed by sites such as Kickstarter, which has seen spectacular growth in the last two years and particularly in 2012.
Bay Area neighbor SunFunder is also applying the crowdfunding model to the solar photovoltaic space. SunFunder has funded off grid applications in the Phillippines and Africa.