Can Crowdfunding Help Cleantech Ride the Big Data Wave?

"Big data is a coming wave of 'green gold,'" says Nick Eisenberger of Pure Energy Partners."Information technology will be the most powerful tool to address resource challenges in our lifetime."

Eisenberger was speaking at the Markle Foundation offices in New York, where Agrion, which bills itself as the global network for energy, cleantech and corporate sustainability, convened an impressive roundtable to talk about advances in funding new ideas and uncovering innovation for energy and sustainability.

Moderated by Peter Gardnet of Breaking Energy, the panel featured, in addition to Eisenberger, Benjamin Healey of Connecticut's Clean Energy Finance and Investment Authority (CEFIA), Richard Robertson, Solar Energy Business Development Manager with GE Ventures, and Dr. Jon Roberts of the Clean.Data.Project.

"Energy is where the most data is," said Clean.Data.Project's Jon Roberts. And the panelists agreed its where the most opportunities are in energy, improving its generation, use, and efficiency. Yet not all the necessary datasets are open.

"The biggest obstacle is generational," Eisenberger claimed. "The older generation, my generation, is not comfortable with the 'open' in open innovation."

Richard Robertson explained how GE Ventures has invested in Quirky, a crowdsourcing platform for inventors, and has turned to the crowd for help with design and product naming.

The innovation is out there, Robertson suggested. 

"Sungevity has an incubator in their Oakland facility, and Solar Mosaic [the crowfunding platform] is in that incubator,” said Robertson. “Mosaic is looking at not just solar projects, but wind, energy storage. They're putting projects in the ground." 

At least one audience-participant in the Agrion session, a project finance expert, called into question some of the deals Mosaic and others are funding and the stated returns listed on the Mosaic site. "We wouldn't fund those projects," he offered. "It's like charity."

But that's precisely the point made by Mosaic and others, such as alternative financing renewable energy companies SolarCity, SunRun, and United Wind, among others. They are there to fund the deals no one else will, deals that aren't big enough for the big banks, which is a pretty good sized niche.

That is, in fact, why these new models exist.

For those not familiar with the Mosaic model: projects are listed on its online marketplace, which allows investors pick projects to fund and then provide the capital for rooftop solar installations. The investors are repaid once the project is up and running and generating electricity. Their first projects were mostly on affordable housing in California.

The company provides capital to developers at about 5.5 percent and collects a 1 percent fee, according to some sources, returning roughly 4.5 percent.

“To rapidly deploy clean energy, the industry needs access to low cost capital and lots of it,” Mosaic co-founder, Billy Parrish, told Bloomberg News last year. “We are able to source capital from the crowd and lend that capital to clean-energy developers at lower interest rates than they would get from banks.”

Platforms like Mosaic, which seek a large, “democratic” community of engaged funders, as opposed to the elite accredited few, got a boost last year when the SEC released its proposed guidelines about crowdfunding as it relates to the Jumpstart Our Business Startups or JOBS Act.

If the admittedly hand-picked crowd at the Agrion session is any indication, crowdfunding is here to stay.

However, as several roundtable participants suggested, it may be best deployed as part of a mix of financing options.

Mosaic Shows Crowdfunding Cleantech May Get Its Time in the Sun

"The road is paved with ideas -- good, bad, and disastrous," I wrote in a blog post about how I nearly started The Disaster Channel, a 24-hour cable network devoted entirely to disasters and their impacts.

Ideas are a dime a dozen. Timing is worth a lot more.

When I set out to develop my green energy web marketplace, variously called "Seat 28B" and "VerdeInvesting," among other names, it was the fall of 2008. 

That's right the fall of 2008. Should be a capital letter on that Fall, maybe even all caps, FALL of 2008.

What seemed like a great idea that summer -- actually, it was an evolving idea that I and my friend Lucinda had as far back as 2006, only then it was for conservation projects -- turned into a really good idea whose time had most decidedly not come by that Fall.

The collapse of the financial markets and downwardly spiraling oil prices conspired to make timing for that idea um, to say the least, problematic. 

Add to that mix the SEC challenges raised early on by the venerable Steve Goodman at Morgan Lewis, and we had a kind of perfect storm against our retail alternative energy investing business. 

As I've said before, we were too small to fail, hadn't taken anyone's money and hadn't hired anyone, so it was fairly easy to downshift and turn it into a consulting practice. 

I still believe the idea of a web marketplace for cleantech is a good one. And this week proved it, as Mosaic, which I've written about here back when they were SolarMosaic, fully funded four projects in its first day of activity.

Mosaic connects ordinary investors to high quality solar projects. Their mission is "to open up clean energy investing and fundamentally change the way energy is financed."

The economy is still bad and some seasoned investors are starting to move away from cleantech. So what's different and why is Mosaic working?

The JOBS Act. 

In 2012, President Obama signed into law the JOBS Act, which stands for Jumpstart Our Business Startups, effectively making it easier for public solicitation by private companies raising money.

The SEC still has to file some rules on the matter, which it didn't do within the 270 days they were given to do so by Congress. Mosaic does not have an official approval from the SEC, but worked with state officials to open their platform to residents of California and New York.

Mosaic had a private launch in early 2011. Since that time it has raised $1.1 million from 400 or so investors and funded 11 projects. This week, they raised $300,000 in 24 hours to fund 4 projects. 

Crowdfunding for cleantech may yet get its time in the sun.

Is It Time for Clean Energy Investing to Go Online?

Longtime readers of The Green Skeptic will recall that back in 2008, I was working on a start-up venture that became the unfortunate victim of the market collapse coupled with, as Andy Swan kept reminding me every time it dipped, the plummeting price of oil after an all-time high of $147 per barrel in the summer of '08.

The idea, which was called "Seat 28B" for a time and VerdeInvesting towards the end, was to build a web marketplace to reduce the barriers to entry for retail investors wanting to help fund green energy projects and companies.

It was an idea that in the fall of 2008 was "too soon to start."

Luckily, we were also too small to fail, to use StockTwits co-founder Howard Lindzon's phrase, and I finally laid the idea to rest about a year after we started.

From its ashes, however, emerged VerdeStrategy, a consulting and advisory firm that has helped dozens of companies articulate their value proposition, prepare for investor pitches and capital raises, and better market their products and services.

But in the back of my mind, I kept thinking my original idea was still valid; it's just that the timing sucked.

So when Spring Ventures's Nick Allen, speaking at SXSW ECO, mentioned Solar Mosaic, I was delighted to see someone implementing one component of what we were thinking -- community-based solar projects with financing provided, in part, by peers and neighbors.

Solar Mosaic is creating what they call "a revolutionary new way for communities to come together and create solar projects on the roofs of local community centers, schools and places of worship."

They hope to "democratize" solar energy development and reduce projects costs through their online peer-to-peer lending system that allows individuals to invest in solar projects in their communities at as little as $100.

I think of them as a Kiva for solar projects.

This week, Solar Mosaic held a groundbreaking ceremony for its first big project: the Asian Resource Center (ARC), in the heart of Oakland's Chinatown, is the first site in Oakland to go solar by raising money on the Solar Mosaic platform. ARC, a non-profit business center, is building a 28.8 kW solar installation that will save the building an estimated $112,684 over the lifetime of the lease.

If Solar Mosaic is the Kiva for community solar projects, OnGreen, is the KickStarter or AngelList for a wider variety of cleantech deals.  OnGreen lists deals of varying sizes and persuasions in its Marketplace section and hopes to become "the world's largest clean-tech social marketplace - brokering deals all across the globe."

Other online marketplaces for social, green, and sustainable goods and services have been popping up as well, including Mission Markets, Microplace, as well as personal peer-to-peer lending sites like Prosper.com.

It remains to be seen whether clean energy investors will flock to crowdfunding opportunities or whether the projects and capital needs can actually be met through such vehicles, but I'm delighted to watch and see whether my "too soon to start" idea for a cleantech focused web marketplace finally has some legs.

Then again, perhaps it's time to dust off the old VerdeInvesting business plan and get back in the game.