Meet the Kickstarter of Solar Energy

Mosaic is trying to radically change solar — by bringing it to everyone.

People enjoy the view from a lifeguard structure as the sun sets at Seal Beach, south of Los Angeles, California on July 9, 2012.
National Journal
Clare Foran
Add to Briefcase
Clare Foran
Oct. 24, 2013, 1 a.m.

One hun­dred and ninety-six per­fectly pol­ished sol­ar pan­els line the roof of the Oak­land, Cal­if., Youth Em­ploy­ment Part­ner­ship, a non­profit job-train­ing pro­gram for at-risk youth. The sys­tem is pro­jec­ted to save the cen­ter close to $25,000 in elec­tri­city costs over 10 years. And it happened in part be­cause of a star­tup that’s try­ing to change the way sol­ar pro­jects are brought to life.

In the past few dec­ades, the price of sol­ar pan­els has plummeted. As the tech­no­logy be­comes more af­ford­able, a vari­ety of path­ways have opened up for res­id­en­tial and com­mer­cial de­vel­op­ment, ran­ging from leas­ing to bank-fin­anced loans. But des­pite an ar­ray of fin­an­cing op­tions, mid-sized pro­jects — such as the in­stall­a­tion of photo­vol­ta­ic pan­els on a com­munity cen­ter or a school — of­ten face prob­lems rais­ing money to get off the ground.

That’s where Mo­sa­ic comes in.

Mo­sa­ic is an on­line plat­form that uses crowd­fund­ing to fin­ance in­vest­ments in sol­ar pro­jects. It works sim­il­ar to Kick­starter, with in­di­vidu­als post­ing pro­ject ideas to a cent­ral, on­line hub and so­li­cit­ing in­cre­ment­al dona­tions to fund them.

“You can go onto the plat­form, lo­gin in a few minutes and browse pro­jects you want to fund,” Billy Par­ish, one of Mo­sa­ic’s founders, ex­plains. “It’s really a new ex­per­i­ence from an in­vest­ing per­spect­ive and what you’re do­ing is par­ti­cip­at­ing in a loan to fin­ance a sol­ar pro­ject.”

Un­like Kick­starter, however, Mo­sa­ic pays in­vestors back. Once a pro­ject starts gen­er­at­ing rev­en­ue, in­vestors earn what they put in with in­terest. The com­pany of­fers a fixed rate of re­turn to in­vestors of between 4 to 7 per­cent an­nu­ally and levies a 1 per­cent fee on all trans­ac­tions. And par­ti­cipants can in­vest as little as $25 to start. The plat­form’s 2,500-plus in­vestors saw re­turns of ap­prox­im­ately $60,000 in Oc­to­ber alone.

This is pav­ing the way for an in­crease in the num­ber and kinds of sol­ar pro­jects that get fun­ded in the United States.

Mo­sa­ic has fully fun­ded 19 pro­jects in six states — Ari­zona, Cali­for­nia, Col­or­ado, Flor­ida, New Jer­sey, and New Mex­ico — and raised more than $5 mil­lion in cap­it­al in­vest­ment for sol­ar power. The com­pany was foun­ded in April 2011 but only began of­fer­ing a re­turn on in­vest­ment to the pub­lic in Janu­ary of this year.

Pro­jects fun­ded through the plat­form in­clude the in­stall­a­tion of more than than 2,000 sol­ar pan­els on the roof of a charter school in Den­ver and 400 sol­ar pan­els to gen­er­ate elec­tri­city for an af­ford­able-hous­ing com­plex for seni­ors in San Bruno, Cal­if. In­vestors also fun­ded a sol­ar in­stall­a­tion at San Diego’s Ron­ald Mc­Don­ald House.

Right now, without Mo­sa­ic, the most com­mon way to buy a sol­ar sys­tem for a res­id­ence or busi­ness is through a bank-fin­anced loan. Banks have strin­gent lend­ing re­quire­ments, however, and people with low in­come or bad cred­it are of­ten shut out en­tirely. Banks are also more likely to fin­ance com­mer­cial-scale pro­jects like a sol­ar farm owned by a util­ity com­pany than they are to pick up the tab for a mid-sized in­stall­a­tion. Ac­cord­ing to data com­piled by truSol­ar, a work­ing group of sol­ar in­dustry par­ti­cipants formed to es­tab­lish a stand­ard risk rat­ing, sim­il­ar to a cred­it score, for sol­ar pro­jects, only 5 per­cent of banks fin­ance loans for sol­ar pro­jects. And, based on the find­ings of Mo­sa­ic’s pro­ject fin­ance team, most banks won’t lend to pro­jects worth less than $10 mil­lion be­cause the trans­ac­tion costs are too high re­l­at­ive to the re­turn on in­vest­ment. 

Mo­sa­ic is chan­ging this dy­nam­ic by sidestep­ping tra­di­tion­al lenders and help­ing cre­ate a new class of in­vestors.

“For a school or a small busi­ness, the cost for a bank to do the un­der­writ­ing on a loan is so high that it just doesn’t pen­cil out,” Par­ish says. “But Mo­sa­ic is a fun­da­ment­ally dif­fer­ent busi­ness mod­el. We’re all on­line so we don’t have the over­head and we can help fin­ance these smal­ler pro­jects at lower cost.”

The com­pany’s goal is am­bi­tious: Mo­sa­ic wants any­one to be able to in­vest in sol­ar na­tion­wide. Due to a com­plex tangle of state-level se­cur­it­ies reg­u­la­tions, it hasn’t achieved this yet. But it’s on its way. Res­id­ents of New York and Cali­for­nia can in­vest in sol­ar pro­jects through Mo­sa­ic ir­re­spect­ive of cred­it his­tory or in­come and ac­cred­ited in­vestors who meet cer­tain qual­i­fy­ing cri­ter­ia in oth­er states can also join in.

“They’re really help­ing to grow the mar­ket for sol­ar,” An­drea Luecke, ex­ec­ut­ive dir­ect­or of the Sol­ar Found­a­tion, said. “They’re help­ing meet a need, which is what if you don’t own a house or you’re a renter, for ex­ample, then how do you sup­port sol­ar? Mo­sa­ic is provid­ing a new av­en­ue for people who are in­ter­ested in sol­ar and who can now in­vest in it without hav­ing to buy their own sol­ar pan­els, which was really the only way to sup­port it be­fore.”

It’s not just about the bot­tom line. Mo­sa­ic’s founders want to drive a trans­ition to a re­new­able-en­ergy eco­nomy and be­lieve the private sec­tor has a ma­jor role to play in ex­pand­ing ac­cess to sol­ar and oth­er forms of re­new­able en­ergy in the United States.

“The gov­ern­ment’s not go­ing to fund the next wave of in­fra­struc­ture by it­self,” Par­ish said. “They’ve played a crit­ic­al role in sup­port­ing re­search and de­vel­op­ment and provid­ing in­cent­ives. But we need tril­lions of dol­lars of fin­an­cing to trans­ition to 100 per­cent clean en­ergy and that’s mainly go­ing to come from privately raised cap­it­al. That’s what Mo­sa­ic is do­ing. We want to make it pos­sible for every­one to par­ti­cip­ate in that trans­ition and be­ne­fit from it.”

What We're Following See More »
REPEATS CONTROVERSIAL CLAIM
Trump: Clinton “Doesn’t Have The Stamina” to be President
8 hours ago
DEBATE UPDATE

At the end of the debate, moderator Lester Holt asked Donald Trump if he stands by his statement that Hillary Clinton didn't have the look of a president. Trump responded by saying Holt misquoted him, instead saying that Clinton "doesn't have the stamina." Clinton responded by saying that when Trump visits 112 countries as secretary of state, he can talk to her about stamina.

WIDELY DEBUNKED CLAIM
Trump: Clinton Camp Started Birtherism
8 hours ago
DEBATE UPDATE

Donald Trump, when pressed by Lester Holt on why he finally admitted that President Obama was born in America, repeated his widely debunked claim that it was started by Hillary Clinton.

“AFRICAN AMERICANS” ARE “LIVING IN HELL”
Conversation Shifts to Race
8 hours ago
DEBATE UPDATE

Hillary Clinton went point by point on how race can so often determine the treatment that people receive, mentioning recent shootings in Tulsa and Charlotte, calling for restored trust between communities and police, and demanding criminal justice reform. Trump responded by calling for law and order and touting his endorsements from police unions. He then said that “African Americans are living in hell,” saying they are just walking down the street and getting “shot ... being decimated by crime."

JUST AS CLINTON INVITES VIEWERS TO VISIT HER SITE
During Debate, Trump Site Appears to Be Down
8 hours ago
THE LATEST

Just as Hillary Clinton was inviting debate viewers to visit her site for real-time fact checking, there appeared to be a problem with Donald Trump's own campaign website. For about a 15-minute period, a blank page or an error message appeared when we tried to load the Trump site.

INTERRUPTS CLINTON MULTIPLE TIMES
Trump Comes Out Swinging
9 hours ago
DEBATE UPDATE

Donald Trump has come out in the first segment of this debate raring to go. Trump has interrupted nearly every answer being given by Hillary Clinton, talking over her time and again. Clinton is sticking to her guns, smiling while Trump speaks and then calling on people to go to her website and see the fact checking being done.

×