Crowdfunding Shines Light on Solar
Focus: ALTERNATIVE INVESTMENTS
Billy Parish of Mosaic explains how the concept of crowdfunding is pushing solar projects into the mainstream.
Nancy Zambell: My guest today is Billy Parish, the president and co-founder of Mosaic. Mosaic is a really interesting company that’s participating in crowdfunding in the solar space. Billy, why don’t you tell us about crowdfunding, and then how it works in the solar area.
Billy Parish: Crowdfunding is really just another word for investing. It’s allowing lots of individual investors to collectively participate in financing something. It’s being used to crowdfund peer-to-peer loans, for consumer loans. It’s being used in our example to crowdfund loans to finance solar projects. There’s a lot of buzz around it, but it’s really just another way to talk about lots of people coming together to invest in something.
Nancy Zambell: Crowdfunding started when people were using equity funding. You’re a little different. You’re actually lending the money.
Billy Parish: With Mosaic, we’re allowing people to directly invest in high-quality solar projects, and these are the same types of projects that banks have been making loans into for decades. Warren Buffett just invested $4 billion in solar projects in California, and we just allow people to do the same thing. The risk profile of lending into a solar project is very different than lending into a business or investing equity in an early-stage company.
Nancy Zambell: What makes it different?
Billy Parish: Your loan is backed by an asset that is generating revenue and the default rate on solar projects is very low.