Mosaic has done a pretty good job of introducing the concept of crowdfunding to solar. By giving anybody the power to invest in solar projects around the United States for as little as $25, Mosaic has become a darling of the cleantech community.
So far, the Oakland-based startup has successfully funded $2 million towards 16 solar installations from normal people investing. But most have been pretty small: the biggest project to date has been a 657 kilowatt installation on a charter school in Colorado.
But now, it looks like the crowdfunding vehicle is getting a lot more ambitious. A recent project listed on the company’s website is for a 12,270 kW solar installation on U.S. military housing in Fort Dix, New Jersey. That’s quite a big jump.
According the listing, the project will provide around 30% of all the electricity needs for 547 homes. It’s being financed through a partnership with bank holding company CIT and military housing developer United Communities. (The U.S. Army and United Communities weren’t available for comment at the time of publishing this post.)
“It says to me, they’re confident enough to go big,” says Matthew Feinstein, an analyst at Lux Research, about the project. “They should be able to finance quickly.”
In general, Mosaic’s annual returns for its investors hover between 4%-6% — well above CD rates. The yield on this military housing project, however, is listed as “variable” on the website and only “accredited investors” are allowed to get in on this project.
But as of writing this, the project is at 20% funded out of half a million from 103 investors and it hasn’t been listed for much longer than a week. Over all, people seem eager to get on board with Mosaic: In January of this year, it sold out three projects worth $300,000 in 24 hours. Some people even complain there are not enough new projects to invest in on the Mosaic platform.
Tackling a project this big may demonstrate some serious fire power in the crowdfunding model that allows anyone to invest in solar. Before Mosaic, there was no outlet for normal people to get involved in solar investments — most solar projects received equity or debt financing from banks or corporations. Mosaic investments are also loans, not equity, and for now, there’s been 100% on time payment.
There’s also bigger investment vehicles emerging to fund solar, including tapping the public markets and bond markets.
Billy Parish, the company’s president and co-founder, told me several weeks ago major institutional investment partnerships are in the works. These partnerships would allow people to invest into solar through their pensions funds or mutual funds, so it could mean much more money getting pumped through Mosaic’s platform.
Feinstein is less optimistic about those partnerships. Institutional investors demand much higher returns than 4%-6% annually.
“Solar financing is changing on a broad scale,” says analyst Feinstein. “Mosaic is just one part of that — but it’s not going to be dominant.”
(Update: Mosaic communications director Lisa Curtis’ response to potential future institutional investor partnerships: “Institutional investors typically have diversified portfolios, which include lower yielding fixed income assets that provide diversification from stocks and other asset classes,” she says over email.)
[Source: Aaron Tilley @ Forbes]