Bonnaroo Goes Solar The Crowdfunding Way

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There are different ways to crowd-source the funding of a solar or clean energy project.

There are emerging peer-to-peer lending platforms like Solar Mosaic which connect investors to solar projects. Unlike Kickstarter, Solar Mosaic seeks to provide a return to its investors.

Perhaps more simply, there’s what the Bonnaroo Music and Arts Festival in Manchester, Tennessee did. The festival’s 50-kilowatt solar project was fully funded by any “opt-in” one-dollar contribution that fans chose to make when purchasing tickets to the music festival. Previous opt-ins have funded a compost pad and garden at the show.

We spoke with Laura Sohn, the Sustainability Coordinator at the festival. The 50-kilowatt array is permanent at the Manchester, Tennessee site and is grid-connected to The Duck River Electric utility co-op. The system uses panels from SolarWorld and has been producing power since Dec. 20. Although not disclosing costs, Sohn said the system will pay for itself in about five years and provides up to 61,000 kilowatt-hours or 20 percent of the annual electricity usage of the site.

Vermont-based renewable project development firm Encore Redevelopment managed the project. Knoxville, Tenn.-based solar provider Sustainable Future installed the 196 SolarWorld panels on the roof of a metal structure in the festival’s back stage area.

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Everybody Solar: Solar Crowdfunding in California

Youness Scally founded Everybody Solar in 2011. Its mission is to help nonprofits go solar, thereby benefitting not only the environment but also the nonprofit’s budget. By reducing its power bills, a nonprofit can focus resources on its programs instead of on operating costs. And that helps the community the nonprofit serves. Everybody Solar focuses on local nonprofits that work to help the people with the greatest need in the community or who are doing environmental work.

Scally’s motivation to start his own organization arose from frustration with the political process: “You hear a lot of doom and gloom about the environment, and I wanted to do something about it. A lot of organizations are doing environmental work, but much of it is focused on policy. For me, and for many people, it’s important to have a tangible effect.”

Nonprofits are part of the 75% in that it can be especially challenging for them to go solar. Not only are their funds generally limited, but they aren’t able to take advantage of tax incentives. So solar might not be financially feasible for them without some extra help. That’s where Everybody Solar comes in.

Everybody Solar itself is a nonprofit. This means they can get grants and other funding that might not be available to a for-profit company, and they’re not motivated by profit or beholden to investors. On the other hand, they can’t solicit investment dollars from VCs or individuals. They can, however, solicit donations from the general public, through their website and at fundraising events.

Rebuilding Together

Everybody Solar is partnering with a nonprofit solar installer, SunWork, which can get good deals on panels in part because of their nonprofit status. In selecting panels, SunWork considers factors like the environmental impact of panels and how the manufacturers treat their employees. And SunWork also provides volunteer training, another way to involve and benefit the community.

For their pilot project, Everybody Solar is putting a solar PV system on the Rebuilding Together Peninsula (RTP) headquarters in Redwood City, CA. Rebuilding Together will pitch in a small percentage of the cost of the system, and Everybody Solar will provide the rest. Scally looked at leases and power purchase agreements, but for this project it turned out to be cheaper to partner with SunWork and let RTP own the system.

In fact, since the first quote for this project in July 2012, the price of solar has declined further, making the project even more feasible. And the payback period for RTP will be under two years. The 13.5 KW system is expected to save RTP about $3,500 a year, which will be freed up for their work: rehabilitating low-income homes and community centers, which includes energy-efficiency upgrades — yet another environmental benefit.

Empowering communities through a multiplier effect

The pilot project is on the small side, but Scally expects it will lead to more, larger projects. As new models emerge for solar financing and crowdfunding, they generally need to be tried out on a small scale before more widespread adoption. Once people see that a certain kind of project works, it’s easier to get more of those projects going. And like many pioneers in this area, Scally would like to create a model that other communities can replicate. His cooperative spirit can be seen in the way he shares information and ideas with other startups. The goal here is not to kill the competition, but to spread solar.

And Everybody Solar’s crowdfunding model also involves community members, giving those in the 75% a chance to participate in spreading solar. While donations are solicited online and can come from anywhere, much of the fundraising outreach is focused in the community — those are the people who can see the project and feel its impact more directly. Community members can even volunteer on the install.

For now, Everybody Solar is focusing on projects in California. Scally envisions eventually expanding to the rest of the country and doing demonstration projects in areas that have fewer options for solar: “If you do a solar project in South Carolina, it might have even more of an impact because people there don’t get to see the benefits of solar as much as in California.”

Solar in general gives a lot of bang for the buck. Besides protecting the environment, it can also provide benefits in areas like jobs, public health, foreign policy, and even national security. Everybody Solar takes this a step further. Their model has a multiplier effect in helping nonprofits lower expenses — which lets those organizations put more resources into pursuing their mission.

How you can get involved

To be part of Everybody Solar’s work, you can contribute online, where you can also sign up to be notified about events and other news. You can also volunteer to fundraise, install solar, or help spread the word. And spreading the good word about solar, in order to get more actual projects up and running, is what Everybody Solar is all about.

This is part 2 in a 3-part series on solar crowdfunding models in California.

Original Article on Mosaic

RE-volv: Crowdfunding Community Solar Installations

Andreas Karelas founded RE-volv in 2011. He started the organization, he says, “out of a sense of frustration felt by many of us working for clean energy. The change isn’t happening fast enough and if it’s going to happen now, we’ll have to do it ourselves. There’s a huge opportunity here to mobilize people who care about renewable energy to take meaningful action that will help deliver renewables to more and more communities.” RE-volv’s mission is to empower people and communities to invest collectively in renewable energy.

What makes RE-volv unique is that they’re using crowdfunding to create a revolving fund for community solar installations. This fund is crucial in supporting the organization’s mission.

RE-volv uses a solar lease model for their community solar projects, and they get revenue from the lease payments. Because they fund projects through donations, rather than financing, RE-volv doesn’t have to pay back lenders. And being a nonprofit, they can invest their lease earnings in the next project. So the fund for their projects can keep growing.

RE-volv is currently crowdfunding for the final $10,000 needed to pay for their first solar project, thus launching the revolving fund. The campaign, which will run through January 20th, is being hosted on Indiegogo and can be accessed at www.solarseedfund.org.

Based on current numbers, once 14 systems are in place, the annual revenues from those will generate a new system of the same size and cost. At some point that will equal two more systems a year, then three, and so on. The potential for the fund to grow is huge.

Empowering the 75%

RE-volv will take tax-deductible donations from anyone but is focusing in particular on people who care about renewable energy, who want to see more solar but can’t get it themselves. These people want to help start tangible projects that they can see in their community. And donations can be of any amount, which allows even those on a budget to participate.

Although donors don’t get a return on investment in the usual sense, Karelas likes to think they get a different kind of return. And it’s a substantial one: “If you donate $10, through the revolving fund that becomes $30 to invest in the next project. So you’re looking at a 300% return on money invested — not for yourself, but for more solar projects. If you donate $25 now, over the 20-year lease period that turns into $100 that you’ve invested in solar.” This can be especially empowering for those who can’t afford more than a small donation.

Empowering communities

RE-volv hopes to put solar on community centers that have a reach, in order to educate as many people as possible in the area about solar. In addition to nonprofits, Karelas is looking at coops that own their own space and serve as a community center — and even condo complexes. For the most part, RE-volv is working with a niche market that’s neither residential nor commercial. These organizations may have a hard time finding a solar lease partner, and RE-volv can provide the solution for them.

Because many nonprofits and community-serving organizations don’t own their building, Karelas is exploring the possibility of a lease agreement with landlords, where the the landlord and tenant would have a separate agreement to cover paying the bills. He realizes that to work, this has to be made easy for both landlords and tenants.

The typical model for their projects is that a community center leases the system from RE-volv, who owns it and maintains it. The community center pays for the lease with a small escalator, and saves money from year 1. And what’s more, at the end of the lease term, RE-volv hands over the system to them, at no cost.

RE-volv is currently working with a number of community centers on project proposals. The first project will pay for three more of a similar cost and size in the 20-year lease period.

Planting a solar seed in the community

RE-volv is not content with just making projects happen. They also want to use those projects to help reverse misconceptions about solar. Karelas notes, “I tell people how great solar is, and how there are solar leases and PPAs that allow people to go solar and save money, and people say, ‘Wait a minute, if this is the case why isn’t everybody doing it?’”

Demonstration projects in communities can help show that solar is affordable and provide a way to educate community members. Events during fundraising and at installations will also help involve the community and get the message across.

This kind of outreach and education will help make it  easier to replicate the RE-volv model — and that’s an important goal. While there are other startups working on similar initiatives, Karelas is confident that RE-volv will succeed and doesn’t see these organizations as being in competition. Instead, he shares information with them in service of his larger mission: to show that solar works and pave the way to spread solar everywhere.

How you can get involved

You can contribute to RE-volv on their website, where you can also sign up for their mailing list. They also have volunteer opportunities, another great way to contribute.

This is part 1 in a 3-part series on solar crowdfunding models in California.

Original Article on Mosaic

In Focus: Philanthropic Crowdfunding

The earliest known citation of crowdfunding was made in 2006 and since then it has exploded onto the startup scene as the best way for fledgling ideas, products, creative projects, and causes to attain investment when banks, venture capitalists, and angel investors may otherwise reject them.

Crowdfunding affords an individual to pursue an interest, hobby or dream without the stress of creating a successful business from the funds. This has given rise to the age of philanthropic crowdfunding. From sites such as Kiva, 33needs, and Start Some Good, people are funding socially responsible ideas and causes that would otherwise lack the traction to see the light of day. Crowdfunding platforms were even used to help the devastating natural disaster, Superstorm Sandy. The rise in this type of crowdfunding has changed the face philanthropy around the country.
The average U.S. household donates 4.7% of their total income to charitable institutions, so the money is there and it is flowing. Some charities have even started implementing crowdsourcing platforms to increase their web virality with JustGiving being a prime example by allowing anyone to create a crowdsourcing page for their favorite charity or organization.

But this new age of philanthropy not only creates a wider and more involved audience of contributors, it also has the potential to create a new breed of socially responsible investment companies such as Mosaic. These companies are spearheaded by a new type of visionary known as the social entrepreneur and can help revolutionize entire sectors such as clean energy and finance.

Currently, crowdfunding can only be utilized in very specific ways, such as supporting non-profit organizations that crowdfund specific causes, but soon that will all change. In 2013, nearly anyone will be able to use crowdfunding to gain equity in a company. This can be viewed as a hybrid between traditional venture capitalism and buying shares on the stock market. It is becoming possible because of the Startup Exemption in the JOBS Act.  Put in place by the Obama administration and approved by Congress earlier this year, the JOBS Act allows people to support startups or other crowdfunding ventures in ways previously impossible.

This could mean a few things as 2013 shapes up to be the “Year of the Entrepreneur.” Firstly, people may feel more inclined to donate to emerging organizations that are more specialized or innovative than an equivalent large charity. Additionally, the net good for the donor finally has a financial element as well. Donors knowing that their donation would not only help a cause of their choice, but also may produce a financial return for them, is something the charity industry has never experienced before.

Secondly, this could change how Americans view small investment. Instead of putting a couple thousand dollars into the stock market, you could crowdfund with emerging impact investment companies; making you not only an equity shareholder, but also putting your money into a company focused on social responsibility.

Having an added monetary benefit not only helps many entrepreneurs pursue a business that benefits the community, but also educates countless others by including them on the ground floor. What does this mean for the years to come? You can expect to see more transparency in investment as well as more opportunities for investment, ultimately creating more jobs throughout the country. Now that customers are able to become investors as well, they adopt a new role: brand evangelists and shareholders, thus promoting social causes further into the public view and garnering support through the crowd.

Original Article on Mosaic

Crowdfunding: Savior to Hurricane Sandy

I currently live in New York City and am one of the luckier people who was not harmed by Hurricane Sandy. Unfortunately, dozens were killed and over 40,000 were left homeless. In a disaster of this magnitude, we come together and people all over the country donate to support the relief effort. But this was the first major natural disaster where the new technique of crowdfunding was implemented to streamline donation efforts.

Fundly, HelpersUnite, and GoFundMehelp people connect through crowdfunding and were leaders in the Sandy relief effort. On these sites people affected by the storm and their friends created a profile where people donated to help them rebuild their homes and their lives. The websites are filled with touching stories of people explaining how their home was destroyed or a family member injured, giving a more personal perspective to those interested in donating.
Devin Thorpe, a contributor on Forbes, highlights a case on GoFundMe where the ex-player of a retired high school football coach found out that his coach had lost his home in the storm and managed to raise over $15,000 in two days via the crowdfunding site.

Other types of crowdfunding sites succeed by acting as a middleman between the funder and large organizations such as the Red Cross. Restore The Shore utilized the Selfstarter platform to raise over $100,000 for New Jersey relief.

Some people have mentioned fears of extortionists with crowdfunding. As a result, some sites have tried to mitigate fear by requiring contact information or even a video showcasing what was ruined such as HelpersUnite. In the end, crowdfunding has experienced little to no fraud. Leading site Indiegogo reports virtually no fraud.

The advantage of participating in crowdfunding as an alternative to donating to larger charity organizations is that you know exactly where you’re money is going. When there are no administrative costs, such as those incurred by charities, the full donation (minus the percentage the crowdfunding site takes) goes straight to the person/cause in need. This could be a better practice since it creates a separation of powers. Instead of blindly donating, you can see someone in your community or across the world is in need and set up a page in their name to collect funds for them. This allows those who are too busy to volunteer to feel more active in the donation process. They are able to see the effect of their funds and can even reach out to the person in need after they have donated.
This new type of interaction creates a more open dialogue and personal community between donors and the causes they support. Although Red Cross and other organizations act as first-responders to a disaster, there are fewer resources for those with long term needs. Crowdfunding allows those affected to not only survive the aftermath, but prosper.

Original Article on Solar Mosaic

Crowdfunding A Solar Project

We have enough solar resources in the United States to power the whole country many times over. And yet, most of us are still not getting our power from the sun. Even with leases making solar affordable for more people, many others are still left out of the equation — including low-income families, renters, and nonprofits.

Crowdfunding a solar project

But what if you own your own house and can afford solar, yet your roof is just not suitable for it? That was the case for residents of University Park, Maryland, a town known for its forest of shade trees. Residents of this middle-class community were interested in solar power but didn’t want to cut down their trees. They had the resources to invest in solar, but nowhere to put it.

So a group of residents, led by David Brosch, got together to explore other options. They found a church in their community with plenty of sun, whose pastor and membership liked the idea of solar. Not only would it save the church money on their power bills — it would also support their passion for stewardship of the earth.

The Church of the Brethren and part of the group who made the project happen, being interviewed by a reporter from American Public Media’s Marketplace.

This was just the beginning of what turned into a 2-year project. After a lot of hard work — including getting legal advice from interested community members, forming the University Park Community Solar LLC, and meeting with the state’s SEC commissioner — in May 2010, a 99-panel solar PV system was installed on the Church of the Brethren.

The church is saving money — what’s in it for the rest of the community? The benefits are many. Producing solar energy partially offsets the payments everyone makes to the local power company, thereby reducing energy costs for the community. And investors can know they’re helping preserve the environment for everyone, even if not from their own roofs, as well as providing an educational opportunity for their children and a financing model that can be used elsewhere.

That financing model has provided an excellent return on investment, one that’s hard to come by these days. Community members were able to invest more than what is normally allowed in this kind of project — they put in an average of $4,000 each — and that fully funded installation of the $130,000 system. Investors are getting annual returns of 7% – 8% over the life of the project, with their investment fully recouped after 8 years.

Easing restrictions to investing

Given these numbers, why haven’t we seen more projects like this one?

Probably the biggest hurdle is securities laws. The laws that are in place to protect the “unsophisticated” investor also make it tricky to fund these projects. In fact, the University Park group had to get an exemption to Maryland securities law. They couldn’t advertise directly and had to keep their pool of investors to 35. And investors had to be Maryland residents.

Volunteers installing solar panels. Soon, these same volunteers may also be able to invest in solar.

The good news is that these restrictions are starting to ease up, and that could change the funding landscape significantly.

Evan Wynns, founder of the San Francisco Energy Cooperative, currently solicits investments of up to $250 to fund green energy projects in the community. To avoid SEC restrictions, he can’t ask for much more than that.

He’s hoping that will change when the JOBS Act, a crowdfunding bill that allows average citizens to invest in startup companies, goes into effect (though signed into law in April 2012, the JOBS Act requires that the SEC write rules on various aspects of the law). That could allow anyone with enough funds to make larger investments — in a relatively low-risk area with good returns.

And that helps all of us. Those who do have enough resources to invest in solar can put their money into something that directly helps those who don’t — as was the case with the Church of the Brethren. There are bound to be more opportunities. So get your checkbook ready, and let’s all work together to make solar available for everyone!

Original Article on Solar Mosaic Blog