Why Sunny Days May Be Good for Your Bank Account

Mosaic, a solar energy company, is promising a 4.5 annual return on investments as small as $25.
Alternative energy used to be ridiculously expensive, but modern technology has brought it to the point where it's actually profitable. (Photo: Hyde Dana/Getty Images)
Jan 8, 2013· 1 MIN READ

You have to figure that if Warren Buffett thinks solar power is a good investment, it might be time to think about putting a little bit of money into the field.

And as of Monday, June 8, if you live in California or New York, it’s that much easier to invest in solar power. Mosaic, a company that crowd-sources funding for solar power, just opened up a handful of investment opportunities for anyone who has at least $25 to throw behind a community solar power installation.

Mosaic launched two years ago, and since its inception has been revolutionizing the way solar projects get funded. “There’s more than enough money to do this—we just need to find ways to tap into that capital market,” Billy Parish, the company’s founder and president told reporters.

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While traditional investors and banks haven’t always been gung ho about funding green energy, there are plenty of people who want to support it financially.

Mosaic’s first projects worked more like Kickstarter campaigns, except without the rewards: Investors kicked in at least $100 to support solar installations at places like community centers and eventually got their money back. The only benefit they received was the knowledge they’d helped push forward the future of clean energy.

Now, though, the company is planning to offer a more traditional incentive for investors: money.

Their new projects offer a 4.5 percent annual return on the initial investment, which they point out, beats out the performance of more traditional investments in the past few years. The first projects they’re hoping to fund are rooftop solar installations on affordable housing complexes. The advantage for Mosaic? It’s easier to convince people to financially back a project when you can offer something in return.

“We're already seeing higher average investment and also expect more investors today than in the previous 2.5 years,” Parish wrote TakePart in an email. “The market for competitive ROI investments is astronomical, the market for zero interest investments in clean energy not as big.”

As of this writing, one of the three California projects posted yesterday is already fully funded, and the other two are 87 percent and 96 percent of the way there. Ideally, one day Mosaic will be able to open up its projects to small investors across the country. Right now the company’s able to work with “accredited investors”—rich people, basically—anywhere in the country. But provisions passed last year as part of the JOBS Act could let anyone stand behind crowd-funded projects like these and earn a return.

After all, solar power is a great, relatively secure investment. Big investors and traditional banks are realizing this. But there’s no reason why they should be the only ones allowed to put their money behind this energy revolution. The more people who can be recruited to support solar power, the more solar power can be built. Let the solar revolution begin.