Is solar the perfect application for crowd-funding? Great story.
Originally posted on Gigaom:
When I first wrote about Solar Mosaic, a startup that’s been building a kind of Kickstarter around funding solar roofs, I was excited about their idea of leveraging crowd-funding to offset the large costs of solar rooftop installations. But the company is only just about to launch the truly disruptive part of its business: as early as this Summer Solar Mosaic plans to start offering people a way to buy into rooftop solar panel projects, and make back a return on their investment over time.
Essentially for the investor it will be like buying the safe and predictable return of a mutual fund. The way it works is that a building owner will lease the solar equipment and enter into a contract for a fixed, low, electricity rate, commonly over about two decades. Solar Mosaic is working with solar lease providers like Sungevity, but Solar Mosaic is the one that organizes the crowd-funding of the money to get the solar rooftop installed. Once the project gets funded Kickstart-style, the rooftop solar panel installation process starts.
Solar rooftops are a surprisingly low risk investment. As Daniel Rosen, co-founder of Solar Mosaic put it in an article for us last month: solar loans are backed by a revenue-producing asset (electricity) and the building owners are just continuing to pay for the electricity that they are used to paying for day in and day out. There is little risk to investors that the buildings owners will default on their electricity payments, particularly since they are also saving money on their energy bills from day one. In addition the costs, timelines and returns for solar panels are pretty transparent as the technology has become increasingly commoditized.