More than 400 investors put in between $25 and $30,000 into the projects, raising a total of $313,000. The solar projects, which will install between 47 kilowatts and 102 kw on affordable housing complexes, were open to residents in California and New York as well as accredited investors from around the United States. Mosaic still has one project remaining for accredited investors who meet certain financial requirements.
The projects offer investors a 4.5 percent annual return, net of servicing fees, with terms of about nine years, said Mosaic. Those returns are competitive compared to other avenues the public might invest in.
For example, 10-year Treasuries are a 1.90 percent, CD are 0.5 percent APY, bonds average 5.2 percent from 2003 to 2012 and stocks in the S&P 500 averaging 4.95 percent annualized returns from 2003 to 2012, said Mosaic.
Mosaic is able to provide returns to its investors because rooftop solar systems generate revenue. The money raised by investors is used to install the solar panels on a building. Mosaic sells power to the building owner through a long-term lease. Revenue generated from selling solar electricity to the building owner is used to pay back investors with interest.
Mosaic is essentially providing a new avenue for projects too small to garner financing from banks. To date, Mosaic has raised $1.1 million from more than 700 investors.
There is some fuzziness surrounding the rules about crowdfunding. The U.S. Securities and Exchange Commission have not yet adopted rules implementing the crowdfunding provisions of the JOBS Act. Mosaic says it is pursuing other avenues for crowdfudning clean energy ahead of the adoption of final rules.