Will a New Scheme For Clean Energy Investment Break Up the Dirty Energy Stranglehold?
This article was published in partnership with GlobalPossibilities.org.
Investing in clean energy is crucial for the environment and profitable — and now it’s also affordable. On Monday, Mosaic, an online marketplace connecting investors to solar energy projects, began accepting investments. Residents of California and New York, two states in which regulators have given their approval, were able to invest in these projects for as little as $25. Mosaic stated that in less than 24 hours, more than 400 investors put in between $25 and $30,000, selling out the company’s first three projects. Investors contributed more than $313,000 to these projects, with the average investment being $700.
“On Monday, hundreds of people became green energy investors — became literally invested in building a clean energy future,” said Billy Parish, Mosaic’s co-founder and president. “And we got a lot of people investing $25 and that’s amazing.”
In a press release, investor Rosana Francescato said, “Mosaic is lowering the barrier for regular people like me -- not just rich investors or big companies -- to benefit from solar power while providing a good return on investment. I invested in several projects, the process was easy and it only took a few minutes.”
Parish said they are working with regulators in other states to expand the opportunity for the nation’s public to fund these solar energy projects. Meanwhile, accredited investors in all 50 states are allowed to fund these projects. An accredited investor is defined as someone who made more than $200,000 in the last two years, $300,000 with a spouse, or has a net worth, individually or jointly, of $1 million.
Parish said he believes Mosaic’s success is due to a prolonged eagerness to invest in clean energy.
“I think there’s a lot of pent-up demand,” he said. “Energy investing has been a bank-only game for a long time.” While Mosaic is allowing community members with varying wealth to invest, its current projects are also community focused, including affordable housing complexes and community centers.
In a commentary in Grist, 350.org’s Bill McKibben wrote, "Building community is at least as important as building solar panels. If we can do both at the same time, we’ve got a fighting shot at a workable planet."
Mosaic receives projects from solar developers who need financing. The company then allows people to invest in the project. The revenues generated by selling the clean electricity to customers are then used to pay back investors. Investors are expected to see a 4.5% - 6.38% annual yield.
The idea to start Mosaic commenced when Parish and co-founder and CEO Dan Rosen were working with Native American tribes to develop and own their own renewable energy resources. Parish said he saw tribes, which represent only 5 percent of landmass, owning about 10 percent of renewable resources.
“We realized that at the core of what we were doing was an even simpler idea — that all of us should be able to develop and own renewable energy resources. All of us should be able to be part of the transition to clean energy,” Parish said.
Parish, who is the co-author of the book Making Good, a book about socially conscious investing, said this concept is one of his favorite parts of Mosaic’s work.
“For people who have been donating to environmental issues and are trying to live a more green lifestyle, there’s been a big disconnect for a lot of those people on their investment portfolios,” he said. “A lot of those people are invested in oil companies or coal companies. … And I think a lot of people want to align their investments with their values.”
McKibben concurs. “We actually have to engage everyone in this world in this fight, and some of them really like money. And it is going to take money to put up all those solar panels and so forth," he said. "I'd far rather that money come from a broad wide community than from a few rich guys like Warren Buffett.” (Buffett invested $2 billion in two solar power plants last week.)
Parish said people’s value proposition “starts with making money, but it also involves creating good jobs, helping organizations save money, creating stronger communities, and reducing carbon emissions all at the same time.”