c.2013 New York Times News Service
c.2013 New York Times News Service
Just after his sophomore year at Yale in 2002, Billy Parish stood before a rapidly retreating glacier in India that feeds the Ganges River, convinced that he had come face to face with climate change and that he had to do something about it.
It did not take long. Back in the United States, he started a youth coalition that, within a few years, had mobilized thousands of people with similar environmental concerns. He never made it to his junior year at Yale.
In the years since, Parish has come to another conclusion: that capitalism is a powerful force that can be harnessed to combat global warming. Now 31, he is well into making that his next mission, building an online solar energy investment platform that could turn ordinary Americans into mini-financiers.
Called Mosaic, the company functions like a virtual renewable energy bank, soliciting investments for solar projects and making loans to be paid back, typically, over about 10 years. Mosaic collects a fee on every loan. It is similar to the crowdfunding platform Kickstarter, a website that matches creative ventures with financial supporters. In the case of Mosaic, with a minimum of $25, investors can earn a return.
“Our goal is to build the No. 1 investment platform for clean energy,” Parish said. Mosaic, he added, allows investors “to not just be passive consumers but to be creators, to be owners, to collaborate to make things happen.”
The company is still in its infancy. About 2,000 clients in 44 states have put in more than $4 million in project financing since it began soliciting money in January, and it is open nationwide to accredited investors — a category that includes certain and high-net-worth individuals — and, so far, to the general public in New York and California.
Whether Mosaic can execute its vision is an open question. But it is poised to grow, with deals in the works that would allow investors to use money from retirement accounts like 401(k)s and IRAs. That, along with new financial regulations that permit broader marketing of investment projects, promises to vastly expand the potential sources of money for solar projects as well as other types of renewable energy the company plans to develop.
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Although it is among the first crowdfunding platforms to focus on energy, Mosaic borrowed inspiration from earlier online ventures that gave consumers more direct access to products and services. Financing clean-tech projects and start-up companies is ripe for such an approach, adherents say, because only a small coterie of investors has been able to participate, making financing harder to obtain and more expensive.
“All these platforms are called marketplaces because they bring populations together, whether it be males and females on Match.com or banks and borrowers on Lending Tree,” said Judd Hollas, the founder of EquityNet, which allows direct investment in startup companies as a sort of venture capital platform for the masses. “It was logical to assume that the same thing could happen and should happen in private equity.”
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Mosaic’s approach is seen by many as bringing together small-scale solar projects, which are by nature decentralized, and a younger generation that is comfortable with technology.
“At a time of social networking and the peer-to-peer experiences of media, of music making, of all these industries, capturing that capability — that distributed, decentralized phenomena — and applying it to financing an energy source that is also built around a distributed architecture is a very big play,” said Danny Kennedy, a founder of the solar development company Sungevity and a member of Mosaic’s board. “That’s why the crowd makes sense. This is a distributed future.”
At the same time, many Americans have been showing an increasing interest in aligning their money with their social or political leanings, especially younger investors. Almost half of millennial-generation investors worth more than $1 million screen their investments for social values as well as value, according to a recent survey by the Spectrem Group, an investor research organization.(BEGIN OPTIONAL TRIM.)
“If I had a mutual fund sitting alongside an investment through Mosaic,” said Stan Hazelroth, a former executive director of the California Infrastructure and Economic Development Bank, “even if it was maybe a notch lower return, I’d still take the Mosaic investment because I’m such a firm believer in the future of renewable energy.”
The seeds of Parish’s evolution toward combining environmental issues with profit were planted early. A child of two liberal-leaning lawyers who fell in love working on a securitization deal — his father specialized in financing for electric utilities — he grew up comfortably in Manhattan, near Central Park and the Museum of Natural History.
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During high school, Parish spent a semester at the Mountain School in Vermont, where his concern for “what was happening on a planetary scale” crystallized; at Yale, he designed his own major in sustainable economic development, and then took a leave that became permanent to build the Energy Action Coalition, which describes itself as “a coalition of 50 youth-led environmental and social justice groups.”
“Young people had been at the forefront of every major social movement in history, and almost nothing was happening with young people and climate change at that point,” he said. By 21, he was managing a $5 million budget and a staff of 80 in the United States and Canada. That work led to an advocacy effort that Parish said helped inspire President Barack Obama’s green jobs programs, as well as a book, “Making Good: Finding Meaning, Money, and Community in a Changing World,” which he wrote with Dev Aujla, a founder of the charitable organization DreamNow.
But it was a stint working at the Black Mesa Water Coalition in Flagstaff, Ariz., starting in 2007, that brought together Parish’s entrepreneurial vision and personal network. It was there that he worked alongside his wife, Wahleah Johns, to shut down coal plants that had fouled the water supply in the Navajo Nation. He also reconnected with Dan Rosen, now Mosaic’s chief executive, who had met Parish while trying to get a solar array for his high school in Ridgewood, N.J., and had gone to work with Black Mesa after graduating.
“That was one of the big, kind of aha! moments about what would become Mosaic,” Rosen said, referring to discussions about developing solar energy as part of the transition after closing the coal plants. Navajo residents, he said, “wanted to own the projects — they wanted to be owners, they wanted to participate, they wanted jobs, they wanted to invest, even.”
Based in Oakland, Calif., Mosaic is trying to capitalize on that desire, finding and vetting as many projects as its staff of 22 can handle while it raises more money so it can expand. Mosaic makes loans only to projects that already have deals to sell the electricity they will produce; it then raises money from investors, who receive a return of roughly 4 to 6 percent as a loan is paid back. The company takes a 1 percent fee on each investment and a small-percentage origination fee on each loan, which varies from project to project.
The company’s projects have been modest so far: among others, a solar array atop a youth employment center in Oakland as well as the convention center in Wildwood, N.J., and apartments at the University of Florida in Gainesville. For its biggest project, it plans to help finance the installation of over 55,000 solar panels on more than 500 military homes at Fort Dix, N.J.
Investors say they like knowing where their money is going, in contrast to buying into a mutual fund. “There appears to be more of a story, and they’re very defined about what they’re investing in,” said Laura Deer Moore, who sits on the board of a community bank and came across Mosaic because she wanted to invest her small nest egg “conscientiously,” as she put it, and was having trouble finding ways to do that. “There’s a defined mission, and I like that about it.”