Crowdfunding Clean Energy
March 7, 2013
By David Bornstein | The New York Times: If you wanted to get large numbers of people actively engaged in helping to solve global warming, how might you go about it? For years, the main approach in the environmental movement has been to sound the alarm bell and implore people to consume less, switch to green products, recycle, and speak up to companies and politicians. It hasn’t always been an easy sell. However, if the approach of a promising Oakland-based start-up takes hold, there may be another line of action that could become available to ordinary people: directly financing renewable energy.
In January, a company called Mosaic, made a splash in the renewable energy world when it introduced a crowd-funding platform that makes it possible for small, non-accredited investors to earn interest financing clean energy projects. When Mosaic posted its first four investments online – solar projects offering 4.5 percent returns to investors who could participate with loans as small as $25 — the company’s co-founder, Billy Parish, thought it would take a month to raise the $313,000 required. Within 24 hours, 435 people had invested and the projects were sold out. The company had spent just $1,000 on marketing. All told, Mosaic has raised $1.1 million for a dozen solar projects to date. Now it is connecting with other solar developers to identify new projects for financing. More than 10,000 people have already signed on and are standing by to invest.
A generation and a half after the first Earth Day, we may be witnessing the coming of age of solar power. Last year, when Warren Buffett’s MidAmerican Energy Holdings Company floated an $850 million bond offering for the Topaz Solar Farm, in California, it was the first time a public bond offering for a U.S. photovoltaic power project had been deemed “investment grade.” The offering was oversubscribed by more than $400 million and the company is now planning a second round to raise potentially $1.265 billion more. And last month, it was reported that First Solar, a manufacturer of solar panels, had signed an agreement with the El Paso Electric Company to sell its power for less than half the cost of power from typical coal plants. In 2011, almost half of the 208 gigawatts of electric capacity added globally came from renewable power, primarily wind and solar (pdf), and almost half of the additional power capacity in the European Union came from solar alone.
A big reason is cost. Over the past five years, the price of photovoltaic panels has declined by about 80 percent. We’re used to hearing about Moore’s Law, which refers to the steady and predictable increases in power and decline in cost of integrated circuits.Swanson’s Law holds that each time global manufacturing capacity of photovoltaic cells doubles, the costs fall by 20 percent.