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Mosaic Launches with P2P Lending for Solar Projects

by Peter Renton on January 7, 2013

Several years ago I installed solar panels on my house. It was an expensive proposition but I really wanted to harness the energy of the sun to power my home. Even with federal and state incentives I had to come up with $12,000 in cash for the installation. There were no inexpensive financing options available back then.

Enter Mosaic. They have created a business model that allows average investors to invest in solar projects in the form of medium term loans, typically nine years. Investors earn their money back as the project generates revenue by selling the solar power. Each project has its own Prospectus and terms. As of this writing there is just one project available for investors (there were two this morning, one was just fully funded) – at the Wildwoods Convention Center in New Jersey.

While this is not true p2p lending obviously, it is probably more accurate to deem it a type of crowdfunding, it is the kind of niche business that I expect to see more of in the future.

Mosaic Opened Today to Investors in California and New York

After signing up for Mosaic several months ago I received an email this morning that they are now open for investors. However, as of today they are only open to investors in California and New York but they are working with the SEC on a nationwide rollout. It will be interesting to see if they can get that done. If you are an accredited investor then you are free to invest from any state. Regardless of what kind of investor you are Mosaic has kept to the p2p lending tradition of a minimum of $25 per project so investors can start out small.

As for the returns, we are not talking about big numbers here – just 4.5% is the typical return for investors. So the target market isn’t your typical p2p lending investor who is looking for returns at least double that number. But there are millions of people in this country who are passionate about alternative energy. It gives these people a chance to earn a decent return while at the same time using their money for something they believe in.

The Mosaic launch was also covered over the weekend by the San Francisco Chronicle and GigaOm.

{ 19 comments… read them below or add one }

Dan B January 7, 2013 at 11:23 pm

I can imagine that this is just the first of many amusing/interesting ideas this year. More glamorous than the U-Haul investment club, I think we would all agree & oh so PC to boot. :)

So, Peter…………does harnessing the energy of the sun take care of all your power needs? No? Perhaps you’d consider harnessing the energy of the atom instead? You need not decide now, but allow me to put you on the waiting list for one of those to be released Toshiba Micro Reactors. Much more efficient, much cheaper than solar, maintenance free, 100% safe. :)

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Peter Renton January 8, 2013 at 7:45 am

We no longer live in that house but it covered about 50% of our power needs – except when we went on vacation and then it was over 100%.

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Roy S. January 8, 2013 at 11:03 am

Peter, how many years did you live in that house, and what did 50% of your power needs equal in dollar amounts? Even if your electric bill were $100 a month (a high amount for an average electric bill) a $50 savings per month would still take 20 years to fully recoup the cost (not taking TVM into account, of course)…and that is AFTER all the subsidies from taxpayers, like myself–you’re welcome! Solar is a very inefficient alternative source (and not cost-effective)…but then again so is basically every other alternative energy source. It will be interesting to see how alternative sources develop (and alternative funding sources, like Mosaic, are so much better than the government investing in all these alternative energy companies that go bankrupt or offering subsidies for ethanol which creates ozone), but I’m staying away from the industry for now. Take taxpayer funds out of the equation, and the alternative energy industry would fizzle away in the sun.

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Peter Renton January 8, 2013 at 11:41 am

Roy, You were spot on with your numbers – we saved about $50/month. Based on a 20-year payback it is hard to justify spending that kind of money. Our decision was not based on economics, although it did help with the resale value on our home. As I said I liked the idea of generating energy from the sun particularly living here in Colorado where we get 300+ days of sunshine a year.

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Peerlend January 8, 2013 at 11:22 am

Dan – speaking as an econophysicist, and, given current externalities and risks, I would prefer the atomic reactor from which I glean power to be located as far away from me as possible. Somewhere around 8 light-minutes away sounds just about… perfect. Naturally, I’m trading a human-dependent (physically- and temporally-) localized risk for a non-human-dependent (p-/t-) distal risk – but I have to live with the latter, anyway, so… ;)

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Dan B January 8, 2013 at 11:57 pm

Uh-huh. So you want the reactor to be located in Mars…………..Oh no wait, that’s not quite far enough is it? :)

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Peerlend January 9, 2013 at 11:26 am

Nope – not far enough. Set the controls for the heart of the sun and you’ll get there in about 8 light-minutes. That sounds like a nice, safe distance for the nuclear reactor – and it’s one with a decent record when it comes to supporting life on this little planet!

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William January 8, 2013 at 4:41 am

This is amazing news! I never heard of this before but now I’m interested. I’m a very firm believer that we need to take care of our environment and now with this I can be a part of that.

Dan… In a couple of years we will be able to literally make a mini sun on earth and harness all of its power. I can’t wait till 2020, when that will be a reality and energy will be unlimited and very near nothing in cost. Thanks to the ITER fusion reactor.

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Peter Renton January 8, 2013 at 7:47 am

William, I think within a couple of decades power generation will be completely different than today. I have no idea what it will be like but I believe alternative energy is only going to grow.

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Dan B January 9, 2013 at 12:02 am

William……….I have no problem whatsoever believing that power generation will be substantially different by 2020 or even that we will be able to, as you put it, “make a mini sun on earth and harness all of its power”.

I do however have as much of a problem believing that it’ll be “very near nothing in cost” to us as I have a problem believing that other life in the universe will actually look like ET!

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Andrew N January 8, 2013 at 6:34 am

I invested $100 yesterday. I love the idea of Mosaic but am hesitant to invest more in a brand new company at only 4.5%.

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Peter Renton January 8, 2013 at 7:48 am

Andrew, I also started out with a small amount in Mosaic as I think many investors are doing. I want to support them but not willing to put a large amount of money at risk yet.

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investforfreedom January 8, 2013 at 1:31 pm

We have been on wind power grid for almost three years now, not for economic reasons, because we are actually paying more, but for the sake of the environment. However, as an investment, alternative energy has not been going anywhere for the past 5 years. I invested in some alternative ETFs for a while but eventually bailed out. On the other hand, the world remains addicted to fossil fuel. In fact, the energy sector fund XLE has been outperforming the S&P 500 for the last five years. http://stockcharts.com/freecharts/perf.html?kwt%2Cspy%2Cxle

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Roy S. January 9, 2013 at 5:44 pm

investforfreedom, you should be thanking all those birds and bats your “environmentally friendly” wind turbines are killing for giving their lives for the sake of the environment. …oh and the people who are living close to those wind turbines who are losing sleep and getting migraines from them (who knows about the animals). …not to mention that the wind turbines actually warm areas around them by bringing warmer air down to ground level.

Doing something because it makes you feel good is generally a bad idea for doing anything. If you’re not careful the emotional feeling and reaction to “helping the environment” blinds you to the consequences of your actions. After all, you’re doing such a good thing how can it be bad? Well, there are some of the consequences. If you can live with those consequences (and who knows how many others we don’t know about), that is fine. It’s the same for people who are burning fossil fuels living with the consequences of their actions (whether real or unknown).

I honestly don’t know which power source(s) has (have) the fewest negative externalities. Your wind farms may be at the top. But just don’t blindly believe your choice is better than another. Or worse, believe that there are no negative aspects to your choice.

Sorry to pick on you, but I often see the phrase “for the sake of the environment” used sanctimoniously (see Al Gore’s use of a private jet as well as his houses, including a $9 million beach house he bought two years ago that will be underwater by the end of next year) and then copied, ad nauseum, by everyone else. Really, I find it rather trite. Humans have this desire to keep everything the same. The weather has to be the same every year from now until the end of time. No species should ever go extinct. EVER! The fact of the matter is that Earth has been a lot warmer (and a lot colder) than it is today–and humans had nothing to do with it. Lots and LOTS of species have gone extinct prior to humans. The environment changes constantly (recent science news is discussing whether the magnetic poles are about switch–something that they say happens, relative to the Earth’s age, rather frequently–causing dramatic environmental changes). So you aren’t doing it for the environment; the environment doesn’t care. You’re doing it for yourself…and there’s nothing wrong with that.

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Peter Renton January 9, 2013 at 5:56 pm

Wow Roy, that is a strong response and obviously quite a bit off topic. Anyway, I think we all make choices based on readily available information. The “right” choice will always be a matter for debate and every energy source has some negative consequences.

I don’t really want to get into a debate about global warming and the validity of one energy source over another,. But you make some pretty big assumptions about investforfreedom and you have no idea whether your assumptions are correct.

Julie Hendrix January 9, 2013 at 4:29 pm

Well, I wanted to invest in Mosaic, but they had a glitch on their financial institution page, and they couldn’t get it resolved. It was sort of frustrating to sit there and watch from the sidelines. I did get an email response from their tech team, to their credit. He stated “a handful out of a few thousand” accounts had this same problem. Never did hear back from them in the end, though. :(

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Peter Renton January 9, 2013 at 5:48 pm

Julie, It is working for me. I am just waiting for my funds to clear my bank before I invest.

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Reya March 15, 2013 at 5:27 pm

I believe these will prove to be as terrible an investment as solar itself is. Sorry, but there is no way I’d ever back a loan like this. Once people realize how very terrible their decision was financially, their enthusiasm for paying back the loan will drop precipitously. I believe that’s why the renewal energy loans on Lending Club stink so much.

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Reya March 15, 2013 at 5:30 pm

And I mean that it’s a terrible investment from an environmental as well as monetary point of view. So you’re already funding people actively making a very bad judgment call based on emotion, and you’re counting on them not leaving you hanging when their emotional high dies. Yeah, not a smart risk. Most CC and debt consolidation loans are to people who made incredibly stupid decisions, but a good number of them are trying to FIX this. Investing in RE loans means you’re investing in the stupidity, not in the attempt to get out of the consequences of prior stupidity. That’s moving backwards to me.

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