Solar financing startup Mosaic, widely known as the "Kickstarter for solar," has a financing platform that allows individuals to invest in small to medium-size rooftop solar energy projects.
On Monday, Mosaic announced that state securities regulators have given the Oakland-based company the green light to offer $100 million worth of new solar investments to California residents. Previously, Mosaic had to register each project with state officials; they've now been given approval to unleash crowdsourcing for multiple projects.
"With Kickstarter, people are patrons of the arts," Mosaic President and co-founder Billy Parish said in an interview. "With Mosaic, people can be clean-energy investors like Warren Buffett."
While Kickstarter relies on donations to fund creative projects like independent films, Mosaic connects investors to solar projects in need of financing. As the solar project produces electricity, it generates revenue and investors are paid back with interest.
Mosaic's latest project, solar panels on the Ronald McDonald House in San Diego, estimates a 4.5 percent annual return and sold out in six hours. The minimum amount to invest in a Mosaic-funded project is $25, but the average investor puts down $1,000.
"We have over 1,000 investors, ranging in age from 18 to 95 years old," Parish said. "We have investors in 44 states, but half are in California."
The average investor is 40 years old. The rate of return is not guaranteed, and there are risks, including that solar panels don't always produce the amount of electricity that manufacturers claim. Also, output can be affected by the weather. Mosaic's website acknowledges that investors could lose some or all of their investment.
Still, the appetite for the concept is strong. Climate change activist Bill McKibben and Hollywood actor Mark Ruffalo have both promoted Mosaic and are among the investors.
"You get to browse projects and pick the ones you want a piece of," Patrick Crane, chief development officer at Sungevity and a Mosaic board adviser, said in a new video explaining the Mosiac concept. "You invest, you get a return, and over time this portfolio builds."
Mosaic is focused on making loans to developers that have solar projects in the pipeline and need loans of $100,000 or more to get the projects finished. Mosaic itself is not yet developing its own projects from start to finish but may in the future.
"We've gotten dozens of requests from institutions that want to go solar with our model," Parish said.
The company says its business model marks the beginning "of a new, transparent and democratic way of financing clean energy through crowdfunding that could disrupt the two largest industries in the world: energy and finance."
Mosaic is a private, venture-backed startup that was founded in 2011. The Department of Energy awarded Mosaic a $2 million grant through its SunShot initiative.
Among the projects by Mosaic are solar installations on the roofs of the People's Grocery in West Oakland and the Asian Resource Center in the city's Chinatown.
"Mosaic is opening the door to allow more people to participate in the benefits of the solar economy," said Adam Browning of the San Francisco-based Vote Solar Initiative. "And they are focusing on small commercial systems -- an undercapitalized niche with a huge potential."
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
To learn more about how Mosaic works, go to: http://bit.ly/10gNb41