SAN FRANCISCO -- As solar energy becomes more widely accepted by a broader spectrum of investors, an increasing number of services also are cropping up to match money with projects. Wiser Capital is launching an online portal to do that and targeting installations in the commercial market.
The Santa Barbara company launched its new website in April, actually, but the site's full features won't be up and running until next month. The company is designing the site to attract three groups of people -- investors, project developers and building owners -- and to coordinate the funding of projects from 100 kW to 1 MW. That project range can been difficult to get financing, said Wiser's managing director, Nathan Homan, because banks sometimes charge too hefty a transaction fee. At the same time, Wiser is banking on a growing interest from wealthy individual and corporate investors who see solar investments as a safe bet.
"There is a whole pool of investors who are untapped," Homan said.
Wiser joins a growing number of companies that act as matchmakers for solar investments. Solar energy projects are no longer a rare breed of investment, yet they aren't so widespread to have many types of investment vehicles built around them. That's changing as companies such as SolarCity work on creating solar asset-backed securities, which will work in a similar fashion to mortgage-backed securities.
Mercatus, formerly called SCS Renewables, has a similar mission as Wiser. Meanwhile, Mosaic has garnered a lot of publicity lately for its push to make solar investments available to the masses. The Oakland startup works with project developers, picks those it deems viable and then posts them online to enable individual and accredited investors to invest in them. Investments can start as low as $25, and the company guarantees returns of between 4-7 percent over five to 10 years. Although its marketing campaign around making solar investments available to everyone, Mosaic is stepping efforts to attract more institutional and corporate investors.
Wiser plans to make money by charging a monthly or annual fee from developers who use Wiser's online tools to create project proposals for building owners. Developers could make use of the data uploaded by building owners, such as size of the roof, age of the building and utility rates, to craft a viable proposal. Building owners could choose to work with one developer or get proposals from several, and they will get to use Wiser's service for free, Homan said.
Wiser has created a rating system to determine the risk and feasibility of each project. Investors can use the rating system to assess the project proposals that have been created. Wiser plans to make an equity investment with its own money into some of the projects generated by its online process, said Homan, who declined to say how big of a stake Wiser will likely take in each project.
A rating system helps to standardize the screening and underwriting process, and Wiser isn't alone is trying to create one that will work well and gain respect in the market. Earlier this year, a group of solar companies banded together to launch the truSolar Working Group to try to develop a standardized risk-assessment system for projects. Two federal labs, the National Renewable Energy Laboratory and Sandia National Labs also are members.
Homan said Wiser has completed a pilot project to prove its concept, but he declined to provide details of the project. The success of Wiser, or anyone else who attempts to create a similar service, will depend on the quality of the projects, the project developers' successful completion of their projects on time and on budget, and the project owners' ability to deliver good returns. None of this will be easy, of course, especially given that the solar market is still relatively new.