I’ve never been to Wildwood, New Jersey. Most likely, I’ll never go. But with a click or two on my laptop, I just invested $100 in a 487 kw solar project on the roof of the Wildwoods Convention Center in Wildwood, on the Jersey shore, thanks to Mosaic.
Like Kickstarter, which enables ordinary people to support a variety of projects that grab their attention, Mosaic is an Internet crowdfunding platform. But Mosaic for now focuses exclusively on solar energy and, unlike Kickstarter, it promises its investors a return–in my case, a 4.5 percent annual yield over the next 110 months. That’s a lot better than 10-year US Treasury bonds that currently return just 1.66 percent a year, and a whole lot better than my money market fund at Vanguard which current returns 0.01 percent. [Of course, investing in solar is also more risky than buying a money market fund–see the addendum below.]
What’s more, I get to support solar power–which won’t work on the roof of my own home in Bethesda, Md., because it is surrounded by tall trees.
I’ve been keeping an eye on Mosaic since last September when I met one of its founders, Billy Parish, in Washington, D.C. Billy subsequently came to Fortune Brainstorm Green this month, and we caught up the other day by phone. Since Mosaic began offering solar investments to a broad public in January, the company has raised about $2.1 million from about 1,500 investors. That’s impressive.
“The idea is that people should be able to invest in, and own clean energy,” Billy told me. “We need trillions of dollars in the coming decades to invest in clean energy. We just substitute the crowd for the bank.”
Think about it–Mosaic is financing distributed energy, using distributed funders, collected over the Internet, the ultimate distributed platform. This is decentralized power at its best.
Billy, who is 32, dropped out of Yale about 10 years ago after spending a summer in India, and visiting a glacier in the Himalayas which feeds the Ganges River.
“I was already thinking about climate and energy, and it all came together,” he said. “Here I was on the other side of the world seeing that the source of fresh water for billions of people was at risk. It was, hey, we are all connected. This is the challenge of our generation.”
He joined the Energy Action Coalition, a student organization, and worked on organizing young people through most of the 2000s until turning his attention to the solar business. Based in Oakland, CA, Mosaic was started by a group of young activists, and currently has about 15 full-time employees, including, importantly, Greg Rosen, a former vice president of solar finance at Union Bank who is the firm’s chief investment officer. He vets all the projects that get financing from Mosaic.
For lenders, the process is simple. Investors can browse solar projects on the Mosaic website and, after registering with the company, put a minimum of $25 into a project. (The biggest investment so far has been $250,000, Billy told me.) The solar projects makes money by selling electricity, typically through long-term guaranteed contracts. Investors are paid back with interest each month. As the website notes, Mosaic investments are “not guaranteed or insured by any governmental agency or any third party, and investors could lose some or all of their investment.”
Most of the solar projects on the site today are fully funded, but more are on the way. “We’re feeling really good about the pipeline of projects that we’ll be bringing onto the platform,” Billy said.
Because of SEC rules, Mosaic is currently available only to accredited investors, who meet minimum standards of income and assets, in most of the US. In California and New York, the company can make its investments available to anyone. So far, Mosaic has investors in 42 states, ranging in age from 18 to 95.
Mosaic itself got started with government help–a $2 million grant from the U.S. Department of Energy “Sunshot” initiative, aimed at getting the cost of solar below $0.06 per kilowatt-hour by 2020. (Mosaic helps accomplish that by lowering financing costs.) The company has also raised about $6 million in venture funding, with Spring Ventures as the lead investor.
This week, Mosaic will roll out a social media campaign to spread the word about its work. Here’s a cool graphic about the Wildwoods project:
An addendum: A reader has pointed out to me that this column could be read as promoting an investment in Mosaic’s projects. I’m hoping Mosaic is successful, and I believe that it has excellent prospects. But I’m not an investment advisor. If you are considering investing in one of Mosaic’s projects, please read all the materials carefully, including the prospectus, which includes cautionary language like this:
THESE ARE SPECULATIVE SECURITIES. INVESTMENT IN THE NOTES INVOLVES SIGNIFICANT RISK. YOU SHOULD PURCHASE THESE SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT
Put simply, Mosaic has to pay higher interest rates than treasuries because it’s riskier.