1st-of-Its-Kind Community Solar Project

November 4th, 2011 by Zachary Shahan

Community solar programs and projects of various sorts are hugely loved here on CleanTechnica, but a new community solar program in California is a little bit different than anything I’ve seen before (and it might be completely unique). It’s essentially crowdfunding the investment dollars for solar projects on community centers. (Think “Kickstarter for solar power on community centers.”) Solar finance company Solar Mosaic and Oakland’s Ella Baker Center for Human Rights are the ones behind it.

Pluses: low-income communities can get cheaper electricity, more green jobs are created, and we cut greenhouse gas emissions and other harmful pollution. Minuses: …?

Oakland’s Asian Resource Center was the first community center to benefit from the program. It got its solar roof, a 30-kilowatt solar installation (enough to power about 35 homes), on October 12. “Our communities are hurting already, but we are not waiting for the worst,” Miya Yoshitani, associate director of Asian Pacific Environmental Network, said at the opening ceremony. “We’re looking to build a solution-rich community. There’s no better time to bring low-income communities together and green our community.”

“We are courageous. We created something new. This is not an ordinary solar project. It represents the power of the crowd, the surplus of power that people employed to make it happen,” said Dan Rosen, CEO of Solar Mosaic.

How Solar Mosaic’s Program Works

Investors in these solar projects can either donate their money or they can get it back in 7-10 years (essentially as zero-interest loans). They can buy “tiles” of the solar roof, each representing $100 of the investment, through Solar Mosaic.

As soon as total investments hit the price of the targeted installation, the project gets built. “The community, which receives the solar project, signs a 20-year lease with Solar Mosaic for use of the panels and agrees to pay the company for the power from the panels at a much lower rate than a utility company charges,” Simona Drevensek of Greentech Media reports.

It’s a way for individuals with money to give back to society, essentially.

“Solar Mosaic is doing what banks do (but without them), while creating jobs and a sustainable future,” said Jeremy Liu, executive director of EBALDC (East Bay Asian Local Development Corporation).

“You save $112,000 over 20 years that would otherwise go to PG&E. It’s a way for the community to get jobs, power and be part of the solar revolution,” Danny Kennedy, founder of Sungevity, said.

OK, I Have Heard of Similar Program

If you were reading CleanTechnica about one month ago, you might remember a “Solar Schools” program started by UK climate activist group 10:10 that I wrote about on October 2. It is actually very similar. The only differences as far as I can tell are that investors in that program provide funding for solar power systems on.. schools, whereas the California program above does so for community centers, and that Solar Schools investors don’t have the option to get their money back.

Know of any similar projects? I’d love to hear about them, and I imagine others here would, too!

Image Credit: Screenshot of Solar Mosaic video at top.

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Tags: community solar energy, community solar power, solar mosaic

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

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Lisa Curtis

Hi all! It’s Lisa here from Solar Mosaic. There have been some very interesting comments on here and I just wanted to help clarify a few things:

1. All of our Oakland projects are subsidized by a celebrity donation which covers about half of the project. Incentives cover part of it and then the rest of crowdfund. The community center pays Solar Mosaic less than would pay on their regular utility bills and we use this money to payback our investors. We only take small (around 5%) developer’s fee which is very little considering the amount of work we put into each project and is less than what many solar developers charge.

2. Most of the monetary benefits from our installations go straight to the community centers. For example, the ARC is expected to save over $100,000 in reduced electricity costs. We are currently in the process of registering with the Securities and Exchange Commission so that we can offer interest to our investors–currently we are not allowed to offer interest to “non-accredited investors”

3. Zach, there’s a small typo: the ARC system is only 30kW, all of the Oakland projects together will make up 140kW.

T Adkins, thanks for your post that definitely helped clear things up. I’m happy to talk more with anyone who has questions. Feel free to email me at lisa@solarmosaic.com
David Mace

I admit to having an overly suspicious mind.

Perhaps the ‘music man’ had to come in and convince people they needed a band, so to speak.

Perhaps everything is fair and square, and a good deal for all involved.

I have looked into putting a solar system onto my own roof, and have been, well, let’s say ‘underwhelmed’ with the honesty and technical knowledge of the various sales people who got back to me, especially a few with those ‘lease’ schemes for home solar systems.

The problem I have with the ‘lease’ solution for home is, if you pull your energy usage down near the point where affordable solar generation can cover it 100%, these schemes consider you to be a bad investment, because now you consume too little power for them to save you enough money versus buying 100% from the grid.

Well EX-CUSE ME for being miserly with my power consumption, because I thought I might invest in solar, sooner or later!

Most of the others only have ONE solution to cram down everyone’s throats. If you ask even one question that’s not on their script, their brains literally crash.

So I’m personally a bit unsatisfied with the experience of shopping for solar, and the options available, and the ridiculous hard-sell idiots who contact me if I fill out a web form. So maybe I’m projecting.
- Anonymous
  
  Being a bit suspicious about plans like this makes good sense. I’ve looked at a couple of lease deals and they didn’t look that good.
  
  I’d like to see more about this one. Based on some of the people involved I’m guessing that they have figured out a way to get solar into the hands of those who would otherwise have trouble getting financing, but I’d like to see that spelled out.
  
  If this is a ‘lease to purchase’ and if the lease protects against rising meter prices then it would seem to be a good deal for the home/building owner. Pay the same for power for the years of the lease while other people’s utility bills rise. And then own the system at the end of the lease period.
  
  That would be a good deal for those who would have trouble qualifying for a solar loan, if that’s the way it works.
  
  Making it a lease would make it easier for the solar company to get the equipment back if monthly payments are not made.
  
  Perhaps a bit of investigative reporting work is called for….
  - David Mace
    
    It’s the “How Solar Mosaic’s Program Works” section that bugs me. It READS like they come up with 100% of the cash to build the thing up-front… then the folks who ‘invest’ get paid back within ten years… but the Solar Mosaic company gets paid for 20 years.
    
    While Solar Mosaic may be investing a bunch of their own capital into it, the article doesn’t SAY so. If so, then it’s just the same arrangement as any ‘rooftop solar’ lease deal. They don’t say how much money they collected from ‘crowd sourcing’, nor do they say how much money Solar Mosaic put up, if any.
    
    140KW is a huge installation. Probably several times what the community center could ever consume during the day. Unless they were running some electric kilns or doing some other kind of light industry.
    
    As far as I’m concerned, if they want to install solar panels and run them, then they should be paying me a flat rate for rent for the space on the roof and taking responsibility for maintenance of the panels AND the section(s) of the roof that the panels are on. They can sell the power to the utility. Whether that covered some or all of my electric bill would be inconsequential; I (or whoever owns the home) would be paid a certain amount of money for the privilege of locating panels there, and have the liabilities of the installation, leaks, insurance, etc. covered. Whether I live in it and pay the power bill, or tenants live in it and they pay the power bill.
    
    A similarly ‘good deal’ would be getting a ‘free’ roof installed with the installation of solar panels. You miss out on a big one-time expense, they get rooftop real estate for their panels with an ideal kind of rooftop surface for the panels. Win-win.
    - Anonymous
      
      I can read Mosaic as a scam, if I take a sufficiently cynical stance, but then I look at some of the people involved and I don’t feel comfortable adopting a cynical approach.
      
      I can take an optimistic approach and read Mosaic as a well-intentioned and useful program designed to get solar into the hands of people who would otherwise not be able to get the needed financing.
      
      My opinion is that we simply don’t have enough information. Perhaps the initial recruited money it the seed money needed to get the program up and running and most of the resulting lease money will be used to install more panels, letting the program grow larger and larger.
      
      As long as the program is not overly burdened by employee salaries this could be a great way to provide solar to people who either wouldn’t be able to afford solar or would have to pay extremely high interest rates.
      
      I’m going to write Mosaic and see if I can get a better description of what they are up to. (Actually, I’m going to lean on Zach to write them. They might want to make a larger statement in terms of an article on this site.)
      Hey Zach! Email coming your way. ;o)
      - Anonymous
        
        Haha, thanks.
        
        Happy to email them with any specific questions.
        
        I guess my take on it is sort of simple:
        
        1. a community gets a solar-powered roof on their comm center.
        2. some good citizens with a little extra money on their hands get the good feeling of donating (or loaning) to a worthy cause.
        3. a company getting more solar installed more quickly makes enough money to stay alive (but probably not to buy an island in the Caribbean).
        
        But yeah, more specifics would be interesting
David Mace

So… the community pays for it COMPLETELY, then the community pays a solar company over 20 years to ‘lease’ the solar panels that the community COMPLETELY PAID FOR, UP FRONT.

Yeah, that’s… ‘unique’.

Maybe I’m not grasping something.

It certainly sounds like a sweet deal for the company that sold that project to the community, but I see no benefit to the community versus simply collecting the money and paying to have the same solar system installed and warranted by any other solar installer, and then NOT committing to paying money to someone else for 20 years for the privilege of using what the community already completely paid for.

Yes, some of the investment was ‘loans’, but I wonder how much work it would be to set aside some funds month by month, and eventually cut those re-payment checks, either a few years from now, or monthly.
- Anonymous
  
  Would it happen without Solar Mosaic?
  
  I think that’s the point.
  
  No one is stopping any individual community or community center from going at it themselves. But the point is that Solar Mosaic is helping them, stimulating them to do so.
- Anonymous
  
  David, I too would like to know more about the financial details. But while we’re waiting, take a look at the people involved.
  
  http://solarmosaic.com/about/team (Make sure you get down the page to Van Jones and Paul Hawkin – names you should recognize.)
  
  I’m not thinking that this is a project with ill-intentions….
- T Adkins
  
  Mosaic helps the community project get funding for the down payment on the leased system.
  The leased system is cheaper upfront than buying a complete system. The place the leased unit sits has to pay for electricity with or with out the solar set up. The leased system saves the place money on the electricity. The leased system is also maintained by the group it is leased from.
  When you compare a leased system to what you would pay for from the grid the 1st year you save just a bit from what I have seen and read it at times is 10-30% savings, but as the cost of grid electricity goes up typically from 3-4% a year, you are free from that rate increase over the 20 years not to say you don’t get a rate increase it would be lower >1%-2%.
  
  If you were a person who set aside your money to help the project whether it be $100, $1000, or even $1million, in about 10 years you get those monies back.
  
  BUT what did you the company or the community get out of that: You as an individual helped your community to have more money freed up for other uses if you use the place that was helped you helped yourself. and then it just cost you time and you got your money back.
  
  The company helped out people it will make some money, but either way with or with out them being there someone was making money, they as a company saved your community money. They helped put in clean power that clean power will hopefully mean less power plants have to be built. The action may have helped people in the community get a meaningful job.
  
  The Community it had its members come together to help each other and themselves out. They saved money and the environment. The learned they can make a difference. They helped to make jobs.
  
  Is this the best thing they could have done? who knows? What we know is Solar Mosaic came in and presented an opportunity for this project. The community accepted this opportunity and it looks like there will be many winners out of this.
  
  I look at this and what do I see, it makes you think…. I just spent $150 to rent a suit for a wedding, the other month I was in Las Vegas for 10days(lets call that $1000 spent), I have a Disney trip coming before the end of the year(call that $600)… So about $1800 that I could have invested in a community and I would even get all that money back and I can even now see what that money would have done for a place like Oakland just sitting there across the bay.
  
  Did I give them any of that money that I will get back? No I didn’t, but I will look into changing that.
  
  -T
  - Anonymous
    
    Good comment.
    
    Thanks.