Image: Dana Smillie / World Bank
Let's say you're one of those people with more than a couple bucks in your bank account. One of those people who likes to "invest" in stuff, thereby allowing the amount of money you already possess to multiply without doing much more than being a "smart investor."
Let's say that in addition to being a "smart investor" you also prefer to use your money to support positive and ethical and society-improving endeavors. This is currently, I'm told, a popular trend. (I, you may have ascertained, am no such investor, as the only stocks I own are the ones my grandmother bought me in high school to teach me about finance. I wonder how much a share of Disney bought in 1998 is worth now.)
However, you, the smart investor, have hitherto been quite limited in the ways by which you could invest in clean energy—one of the most positive and ethical and society-improving endeavors going. And today's as good a day as any to start: one of the new portals to solar investing, Oakland-based Solar Mosaic, invited anyone in the U.S. to invest in three new solar projects--one in New Jersey the other two in California--with an annual return on investment between 4% and 6%.
Yes, you could invest in a publicly-traded cleantech company like SolarCity or Tesla, but given recent market volatility and uncertainty in the sector, you could be forgiven for holding out. Those stocks may be considered "high risk."
Home Solar Installation
Or, you could invest in clean energy by, say, installing solar panels on your roof—an investment that would eventually earn you money via energy savings over the years. Problem is, those systems are prohibitively expensive: they cost thousands of bucks—the average home solar installation costs $20,000. Which means the option is great for upper-middle class suburbanites, but not so great for the other 85% of America.
Or you can take advantage of government incentives and innovative leasing schemes provided by companies like the aforementioned SolarCity—but they often still require a solid amount of upfront capital, and apartment dwellers and renters are still out cold.
So here's what you can do instead, smart and good investor. Use the newly SEC-approved Solar Mosaic, which has been called "the kickstarter of solar" about a hundred times, to invest in a local solar power project. Mosaic has put together a system that allows investors to crowdfund local solar installations—on the roof of an affordable housing complex, say. After the array has been paid for and installed, that delicious clean power gets sold to customers and the project uses the revenue to pay back investors with interest.
Currently, the California-based solar projects open for investment through the Mosaic platform are offering a 4-6% annual fixed return (Mosaic keeps a fee of 1% of the money raised). That's a pretty sound deal—just as good as one of those mutual funds my grandparents bought me. Not only that, but your cash is funding something that's decidedly more tangible than a publicly-traded stock.
On Monday, the company opened the doors to investors in New York and California, to fund three new solar projects. Billy Parish, founder and president of Mosaic, wrote in an email "We’re doing a kind of “solar money bomb” today, aiming to fully fund some of the projects we just listed. A few of the projects are already almost fully funded...I’m blown away by the support." As of 2pm Pacific time, they've had 230 investors put in $144,800.
Green guru Bill McKibben is impressed, too. He calls Mosaic's model "actuarially sound, ecologically sound, and spiritually sound."
You, the investor, are actually financing that glorious slate of silicon that brings clean energy to a community. You, the investor, are giving folks an actuarial alternative to coal or gas or nuclear power. You, the investor, are distributing power amongst the people, helping to break the hold that monopolistic utilities have over our power delivery system.
If you're a professional trader or a Silicon Valley insider, go for the high-risk, high-reward cleantech stocks. If you're a homeowner, install the panels. If you're an ordinary fellow like the rest of us, throw some bucks at a solar project and make a solid return in the process.