One of the most popular methods of financing a Los Angeles or Orange County solar project is a lease agreement from a third-party institution. Solar leases allow homeowners to pay for their solar panels over time while still saving money on electricity costs.
In fact, over 75% of California’s new solar installations in 2012 were paid for with a solar lease, rather than being purchased outright with a large cash payment. Many speculate that 2013 and 2014 may show an even higher percentage of leased solar systems.
But some solar installations, particularly mid-sized projects that would be put on the rooftop of a school, church or other nonprofit institution, have trouble securing such solar leases or loans. This is mainly because banks are less likely to fund a larger project unless the borrower has both a good credit score and considerable equity — something that many organizations lack.
Mosaic: Loaning Funds for Solar Projects
Enter Mosaic, a startup based in Oakland, California, that helps institutions across the United States convert their facilities to solar. Similar to Kickstarter, Mosaic is a crowdfunding platform that aims to connect investors with solar projects.
The idea is that anyone can invest in a solar project, and once the system is completed, they receive both principal and interest repayments on the power that is produced from the solar panels. Projects typically pay about 4-7 percent annual interest.
One of the biggest strengths of the Mosaic platform is that the loaning system is flexible. Investors can decide how much they are willing to invest in each project.
How to Become a Solar Investor
Getting involved in a Mosaic solar project is fairly easy. Log on to the platform on their website and then browse through the different investment projects. Once you choose from the options (previous projects include solar panels for military housing, schools, and a local convention center), you can finance a local project in any amount from $25 up.
Since the company began soliciting money a year ago in January of 2013, they’ve raised $5.5 million for solar projects from thousands of investors. These funds have led to the completion of 27 solar projects in six different states so far.
Among the funded solar installations are a photovoltaic (PV) system with 400 solar panels at an affordable housing facility in San Bruno, California and 120 solar panels for the Asian Resource Center in Oakland, California.
Limitations of Mosaic’s Solar Investments for Other States
There are a few limitations that Mosaic will need to sort out to become more useful for organizations looking to acquire a solar electric system. Certain states have securities regulations that prevent residents from investing. However, these restrictions do not apply to Californians. Any California resident may invest in a Mosaic solar project and earn real income back on their investment
In one short year, Mosaic has already proven itself to be a revolutionary way for institutions to switch to clean, solar energy. They will be a “green” corporation to watch in the coming years.