Known in some circles as the “Kickstarter for Solar,” Mosaic (formerly Solar Mosaic) has been making headlines for breaking new ground. The for-profit company earned approval from the U.S. Securities and Exchange Commission to adopt a first-of-its-kind mutual fund type of investment structure for RE installations and offer investments to accredited investors nationwide. Though the company remains true to its solar roots, the San Francisco-based startup recently shortened its name to “Mosaic” and opened the platform to other clean energy projects. Since its 2011 start, this B Corporation has raised more than $1 million and funded 12 roof-mounted PV systems ranging from 1.5 kilowatts on the Navajo Project in Arizona, to 487 kW at a convention center in Wildwood, New Jersey.
How it works: On average, the company provides capital to developers at about 5.5%, takes a 1% fee, and pays investors a 4.5% return, typically over nine years—a stronger return than 10-year treasury notes, savings accounts, and most certificate of deposit accounts.
$$$ Until September 2012, the company operated under a zero-interest-loan model—meaning that if someone puts $100 in, they get $100 back over the number of years specified in the project. Unlike most crowd-funding sites that follow a donation model with zero return, Mosaic works with securities authorities to offer investors returns ranging from 4.5% to 6.4%. The investors are repaid their initial investment and interest with the revenue provided by the system’s monthly solar power bills.
Among the first names in the game, Razoo seems to have staying power. Since its 2007 debut, the platform has raised $140 million for nonprofits—nearly half in 2012 alone, in large part due to its Giving Days, 24-hour online fundraising campaigns that are structured like contests, with prizes for top fundraisers. More than 14,000 nonprofits around the country—including Grid Alternatives, Black Rock Solar, and Solar Electric Light Fund—raise money on the site. San Francisco-based nonprofit blueEnergy is running a campaign for solar installations in rural Nicaraguan communities, while the Empowered By Light Foundation is raising money to buy solar panels for a high school in Shangombo, Zambia.
How it works: While Razoo is a for-profit entity, all donations are tax-deductible at 100% and paid out via its charitable foundation (in accordance with U.S. tax laws). Individuals, or teams of individuals, can run campaigns for a cause they care about, or nonprofits can directly host fundraisers. Campaigns must benefit IRS-registered nonprofits.
$$$ Razoo is a donation platform, which means donors do not receive any repayment for their contributions. The platform collects a 4.9% fee from the funds raised, which covers administrative costs, including credit card fees. There are no setup or subscription fees.
Launched in July 2012, this newcomer is off to a good start, with five solar lighting and mobile phone charging projects fully funded and several others underway. Founder Ryan Levinson worked on clean energy strategy at the World Resources Institute before working in the banking industry as vice president of environmental finance. Now, he is leveraging his experience to finance off-grid solar projects in East Africa and Asia. In its first six months, the startup raised $70,000 from roughly 325 investors in 27 countries, including $50,000 for SunnyMoney to purchase and sell solar-powered lights to families in Zambia; $15,000 for Angaza Design to provide pay-as-you-go solar light and mobile phone charging to families in Kenya; and $4,000 for Hybrid Social Solutions to bring 100 solar-powered lamps with mobile charging capability to households in the Philippine islands of Palawan.
How it works: SunFunder partners with solar businesses and organizations that are too large for microfinancing and too small for commercial financing. Investments are collected online, and those funds provide low-interest loans for projects. As the loan is paid back, SunFunder returns the principal to project investors. Two of the five fully funded projects are already paying back their loans.
$$$ A zero-interest repayment platform, which means “investors” are repaid the amount they invest without any interest—put in $25, and you get back $25. The company collects a 5% administrative fee from the amount raised—plus variable interest over the repayment term, typically 12 months or longer. The minimum investment is $25.