Skip to content

The Movement toward Crowd-funded Renewable Energy

June 11, 2012

The explosion of crowd-funding in various areas (largely artistic projects and technology startups, see: kickstarter.com) has contributed a valuable path to increasing participation in and expanding access to capital deals. Unfortunately, this trend has been slow to work into environmental progress. Recognizing this delay, I posted the following tweet:

The article to which I link explores possibilities for strategies to expand access to energy in the developing world, a key, though, persistently unaddressed topic in energy politics.

There is a segment of the unserved market that poses particular challenges to business as they do not exert effective demand for products and services. However, opportunities do exist for business models to reach this group and there are instances, solar lighting being one, where payment for a device can be reimbursed through kerosene savings in just a few months. Small energy companies cannot get the loans to start-up, meaning that there is a lack of energy SMEs for investors to put money behind. There are only a few finance organisations, such as E+Co, that are helping and investing in start-ups. There is the need to educate local banks and other finance institutions and encourage them to invest in sustainable energy start-ups.

Within a couple of weeks of making the above post on Twitter, I was surprised to hear about Solar Mosaic, an Oakland-based solar micro-financing initiative that leverages community financing to expand access to solar energy. The following video introduces their concept.

+

+

A friend, Sustainable John, Senior research associate at Berkeley National Laboratory and world-renowned eco-rap star, had sketched out some rhymes upon the completion of a Solar Mosaic project at the Oakland St. Vincent de Paul. I lent a hand in the filming of the “Occupy Rooftops” video, which John recently debuted with this all star tweet which links to the following video:

+

+

There are several reasons that Solar Mosaic, specifically, and crowd-funded renewable energy, generally is a great step toward the future of energy.

Vacant ‘Tops, Sitting Pretty

photo courtesy of Bright Farms

Population density has encouraged the inventive use of rooftops in metropolitan areas. Rooftop farms, for example, are increasingly common. A deal was recently made to develop what at 100,000 square feet may be the largest rooftop garden in the world at a former Navy warehouse in Brooklyn. Rooftop solar only presents another creative, efficient use of space in an increasingly resource-crunched world.

Two Birds, One Stone: Expanding Accessibility to Financial Tools and Clean Energy

Contributing to the process of “greening” the grid is inaccessible to much of the population. As permanent installations, often costing above $10,000, how do renters and low-income residents support solar power?

Solar leasing provides clean electricity at rates usually than the household’s previous conventional electricity costs with no initial payments by leasing solar photovoltaic panels to consumers.  Traditionally, consumers were required to privately fund their panels and the installation, which requires the consumers to bear significant upfront costs. The development of this market has expanded access to solar energy, as detailed in a recent piece by Bill Scanlon at the National Renewable Energy Laboratory.

The new business model lets homeowners save money the very first month, rather than breaking even a decade after an initial investment of $5,000 to $10,000. Analysts with the U.S. Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) found that the solar lease business is surging in southern California. And the model is being adopted in less affluent neighborhoods that had avoided customer-owned systems. The NREL study found a positive correlation between customers outright buying solar energy systems and customers living in neighborhoods where the average household income was $150,000 or more. But for third-party-leased solar panels, that positive correlation appeared in neighborhoods where the average household income was just $100,000 or more.

Sungevity and SolarCity are two leading companies in this space.

Crowd-funding these projects further expands the accessibility of clean energy by allowing for renters to contribute to the installation of solar projects on the roofs of others.

The US is going Solar, but Big Solar Projects are not Ideal

EIA Maps States with Renewable Portfolio Standards, or laws requiring a certain of electricity generation to be procured from renewable resources (Green). States in yellow have goals, which are not bound as inflexibly by law.

A Renewable Portfolio Standard is a law that requires a state to procure a proportion of electricity from renewable sources by a certain date. California, for example, mandated 20% of its electricity from renewable resources in 2010 and 33% in 2020. The map above delineates which states have signed an RPS into law, and which have passed optional RPS-like goals. These measures among others have pushed recent growth in renewable energy generation in certain regions of the US.

Desert Tortoise III

The endangered desert tortoise habitat coincides with some of the most productive areas of the country for solar power (Sandy Redding)

Many states, such as my home state of California, have, as a result, turned to big (>50MW) solar projects in the desert. These projects, though, as industrial intrusions into otherwise undisturbed settings, present various environmental impacts, not least of which is their impact on desert-dwelling endangered species.

Moreover, large desert solar projects cause grid-integration complications. Transmission requirements for large desert solar projects–that is, the need for an infrastructure to transport power to urban consumption hubs–increase the economic and environmental costs of solar integration, reduce the amount of power available (due to conversion processes), and put additional strain on an already distressed American grid.

Rooftop solar, conversely, places power generation immediately above consumers, simultaneously obviating the need to develop more land and minimizing transmission requirements.

Moving Forward

Solar Mosaic is thus, appealing on many levels, attracting those interested in: improving air local quality, reducing greenhouse gas emissions, reducing energy costs for local businesses, among other goals. Furthermore, beginning this summer investors will be able to earn returns interest on their investments in projects. The company, however, is currently in quiet period, with the header of their website presenting the following prompt:

On April 24th we filed with the Securities and Exchange Commission and several states to offer Solar Power Notes to the public, with proceeds going to fund solar power projects. While we work with regulatory authorities on the details of our offering we are very limited in what we can say about the offering.

Nonetheless, Solar Mosaic is expected to make a positive announcement this week. With Solar Mosaic’s regulatory challenge soon to be in the past, where do we go from here? How do we continue to make clean sources of energy more accessible?

Further Reading:


Advertisements
3 Comments leave one →
  1. June 13, 2012 07:08

    rad article. thanks for the promotion.

  2. July 31, 2012 08:45

    Great article Tim and thanks for highlighting Mosaic’s work. As you noted, we’re currently in a quiet period but we will be launching a new model soon and will be offering exclusive early access to everyone who signs up at http://www.solarmosaic.com before then.

    • July 31, 2012 11:05

      Thanks for the note, Lisa. Can’t wait for the launch–I registered months ago.

      Cheers,
      Tim

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: