Crowdfunding, Meet Renewable Energy!

This is the year of crowdfunding. Organizations like IndieGoGo and Kickstarter have provided the platform for entrepreneurs leveraging their networks to support their startup dreams, already raising millions of dollars per month globally– and this year the JOBS Act will create even more opportunities.

The “Jumpstart Our Business Startups Act” (J.O.B.S. for short), which was signed into law on April 5, 2012 to create a new exemption for offerings of “crowdfunded” securities, allows companies to offer a return on investments when funds pass through a certified crowdfunding portal. Specifically, the JOBS Act amends the Securities Act to exempt portals from the requirements when they offer and sell up to $1 million in securities. That’s a lot of seed money for a start-up, and more than enough money for a community-scale solar or wind project.

Companies like Oakland’s Solar Mosaic, the world’s first online platform for people to profitably invest in solar power projects, allows people to move money from a savings account with little return into investment in solar panels that produce electricity and pay returns over time. And while projects like People’s Grocery in Oakland — one of the first projects crowd-funded through Solar Mosaic — operates with a zero-interest model, the JOBS Act has made offering investors an actual return on their money possible. It’s expected that we’ll see the first investments of this kind happening towards the end of 2012 or beginning of 2013. 

Which brings us to some really exciting stuff that will also be enabled by the JOBS Act: distributed renewable energy funded by community members through these portals. With ambitious state and federal renewable energy targets to meet, we’ll need energy from multiple sources beyond the traditional utility-based system. And while we are seeing a historic rise in the US in residential solar, leveraging the many spaces fit for solar beyond our homes’ rooftops will be key. Programs that bring the economic benefits of energy production to local communities, allowing residents to participate, will have great community benefits. These projects will convert underutilized spaces in cities to energy-generating hubs, could potentially reduce bills for ratepayers, and can help meet renewable energy targets and create a more stable grid.

I, for one, am thrilled that my investment opportunities are widening. With my limited resources, I would much rather invest in renewable energy in my own community than make marginal returns with institutions I don’t have any personal involvement with. I can’t wait to see local Bay Area parks with wind turbines or solar gardens as they have in Antonito, Colorado at their water treatment site, where the half-acre, 50-kilowatt site is sufficient to power 20 homes.

Community-funded renewable energy is an irresistible concept, and at Saatchi S, we’ll be looking for ways to support the shift.