The company just won $1 million from a Verizon grant program, announced Wednesday, to come up with a plan to go international, which would include a loan product to fund solar panel installations, a mobile app for investors and pilot projects to be implemented before the end of this year, said Dan Rosen, CEO of Mosaic.
Founded in 2010, Mosaic has gotten good publicity with its crowd-funding model to match investors with solar project developers in the United States. The company styles its online fundraising efforts as populist campaigns to make solar investments available to the masses. People can put in as little as $25 into a project and get a stead return of 4% to 5.7% over 5-10 years, though the average investment amount was $1,000 when I spoke with its co-founder Billy Parish last year.
Mosaic’s projects are located on commercial properties and at affordable housing and nonprofit sites. The company is working on a loan product for the residential market.It makes money mainly by charging a loan origination fee that is typically 2% to 5% of a loan, and a 1% annual fee from investors. Mosaic has raised $6.6 million for 20 projects since January 2013.
The growth of the U.S. solar market has attracted many startups that try to bring together investors, project developers and home or business owners. These companies include EnergySage, Wiser Capital and One Block Off the Grid.
Mosaic is joining a growing number of companies that see opportunities in bringing electricity to underserved communities and a world where population growth will demand a corresponding increase in energy production.
For its international expansion, Mosaic wants to fund projects in communities with unreliable — or no — electric grids. But unlike efforts by some nonprofits or companies that distribute solar power chargers or other devices that allow people to draw electricity on the go, Mosaic is also interested in projects that will pipe electricity to homes, Rosen said. That would entail installing not only solar panels but also energy storage and cables for distributing the energy, he added.
The popular use of mobile phones in developing countries for doing business and paying bills is key for making Mosaic’s plan work. The company will loan money to project developers who could use the pay-as-you-go model to sell power to homeowners. In many communities with poor access to electricity, the use of diesel power or kerosene lighting is so expensive that solar power can be a cheaper option.
Mosaic plans to use some of the Verizon grant to develop a mobile app for people who want to invest in its projects, not just those that will be located overseas. People already can use their smart phones to go to Mosaic’s website, peruse projects and fork over money, but there isn’t an app available to make that a more user-friendly experience.
Rosen said Mosaic is looking at carrying out $1 million worth of pilot projects this year in one of the four regions it’s interest in: Sub-Saharan Africa, Brazil, India and Southeast Asia. The pilot projects will be small and help to gauge investors’ interest and to spot — and solve — problems.
What kind of returns investors could get from these microgrid projects remains to be seen. Mosaic still needs to create a loan product and investigate some of the risks involved in overseas lending. Installing solar power projects in more far-flung places could also be more expensive than in regions where solar power generation is more common.
“There will be billons of people who will require a huge amount of electricity. We want to make sure they can leapfrog with solar and not having to go through the coal or oil age,” Rosen said.