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Fly low over California, and you’ll see a patchwork of black and shiny rooftops fitted – with solar panels. It didn’t always look like this. Just over a decade ago, there were fewer than 500 solar rooftops in the state. By last year, that jumped to over 160,000. Much of that growth has happened in just the past few years. It doesn’t stop there; national industry analysts say the solar sector grew by a third in just the first quarter of this year, with California leading the charge.
A few things are making solar more accessible, among them: cheaper panels, rebates, and new ways to for pay for them. Crowdfunding is among these new and creative ways to finance solar panels. Instead of paying tens of thousands of dollars to install solar, other people pitch in and get something in return. It’s like a Kickstarter for your electricity bill – and it’s a business model that allows people to participate directly in making solar happen.
It happened for the Shawl Anderson Dance Center in Berkeley. As piano melodies spill out the door, and dancers walk in and out, Managing Director Rebecca Johnson explains how and why her studio went solar. For one thing, she says, they were spending about $400 a month on utilities. Then they noticed their neighbors.
“All our neighbors are totally residential homes and when they got solar, we thought wow our roof is the same exact slope as well,” says Johnson.
As they were figuring out their options and getting quotes, they got an unexpected offer. A man named Andreas Karelas offered them a lease to own system that would power 100% of the center’s electricity needs. They wouldn’t owe any money up-front and their monthly bill would drop.
When she saw the offer, Johnson says she thought, “the proposal it looks too good to be true. I don’t understand where the loophole is.”
Andreas Karelas is the founder and executive director of the non-profit RE-volv, based in San Francisco. He says, “our mission is to empower people to invest collectively in renewable energy.”
In other words, to crowdfund the dance center’s solar panels.
Crowdfunding is exactly what it sounds like. It’s a way to raise money from a lot of small donations instead of, say, one giant bank loan. The dance center is a classic example. RE-volv launched a campaign through the website Indiegogo. In the campaign video, Karelas encouraged people to think about energy in a new way, “about individuals and community centers that are generating their own power on their homes and places of work that use that energy and then share it with their neighbors.”
RE-volv raised about $25,000 through foundations and donations from 300 people around the world. That money paid for the upfront costs. Once the project was underway, the dance center started paying just under $300 a month to lease the panels. That money goes into a fund that generates interest, and helps pay for future projects. So when you donate 50 bucks to the dance center’s roof, you’re not just supporting them – you’re also helping other projects down the line.
“So our hope is that people will be eager to kind of put their money into something where it does earn a return but they're not asking for the return back themselves. They’re asking for the return to be reinvested into more and more solar allowing it to grow exponentially,” says Karelas.
This is pretty different from how solar providers usually work. In a typical lease, the dance center would make payments for 10 or 20 years, then at the end of that either renew the lease or buy the system at market value. If they didn’t, or couldn’t, the company might take the panels back. With RE-volv’s model, the dance center will own its system outright after 20 years.
“For us it’s not so much the finances as the decision that we made and having our community know that their dancing is now solar powered is just a powerful sense of community,” says Johnson.
RE-volv is just one of several companies trying out models for crowdfunding solar energy. Dan Rosen is the CEO of Mosaic, an investment crowdfunding company based in Oakland. Their model also offers a return – but this one is for investors.
“Where our base of investors can become advocates and some of the best advocates for clean energy, because they're invested in it. Because they have skin in the game,” says Rosen.
Mosaic provides an online platform where anyone can invest directly in a clean energy project and earn 4-6% interest. Investments can be as little as $25.