Updated: At 9AM (PST) on Monday, the Kickstarter of solar, Solar Mosaic, will officially open its site to residents of California and New York, as well as accredited investors, looking to make money by investing in solar panel roof projects. For months (at least since last summer), Solar Mosaic has been enabling a small amount of investors to experiment with investing in, and earning money from, the returns from solar roofs, but this is the company’s big public launch.
The company was founded back in October 2010, and I wrote one of the first profiles of Solar Mosaic in October 2011. It took the startup a little over two years to test out its beta Kickstarter-style platform and become registered to share securities with the public. Last year, it got a vote of confidence from the crowd funding bill. The company is backed by Spring Ventures.
For potential investors, solar roofs can provide a low-risk return — anywhere between 4 and 12 percent on an investment — kind of like investing in a mutual fund. Building owners lease solar panel systems and enter into a contract for a fixed, low electricity rate, commonly over about two decades. Solar Mosaic organizes the crowd-funding to get the solar rooftop installed, and works with a solar lease provider like Sungevity. Once the project gets crowd-funded, the rooftop solar panel installation process starts.
Solar loans are backed by a revenue-producing asset (electricity) and the building owners pay for the solar electricity monthly in the same way they have been paying their monthly utility bill. The buildings owners aren’t all that likely to default on their electricity payments, and the costs, timelines and returns for solar panels are pretty transparent as the technology has become increasingly commoditized. Another company that has created a site for crowd-funded solar is SunFunder.
Solar Mosaic says its first investments will offer a 4.5 percent annual return, including servicing fees, with a nine-year term. The company says it is offering “a better expected yield than most investment products available to the general public.” The company will hold a press call at 10 PST, and we’ll update this story after the call.
There are three new solar projects that residents of California and New York can put money in as of Monday morning, including solar panels on the roofs of affordable housing projects in Corte Madera, Calif., Salinas, Calif., and San Bruno, Calif.
The company said on a media call that the SEC approval process took longer than expected because what Solar Mosaic has been working on is so novel, and because the SEC also has been slow on implementing the Jobs Act.
See our previous stories on Solar Mosaic: