According to Bloomberg News last week, crowdfunding solar could become a $5 billion investment vehicle in the next 5 years. This exciting development will connect people who want to invest their money responsibly with solar projects that need financing. SolarCity, the biggest U.S. solar power provider by market value, is getting into the space presumably to finance their residential and large commercial project arms.
However, some projects that are harder to finance might not benefit from this development. Small nonprofits and cooperatives are often underserved by solar financiers since they have a harder time taking advantage of solar tax credits, may not have qualifying credit ratings, and pose high transaction costs.
Fortunately, the power of crowdfunding is also being used to provide solar financing to these outlying organizations. RE-volv, a nonprofit based in San Francisco, has developed a new way to crowdfund solar for community-serving organizations. RE-volv has pioneered a revolving fund to finance solar energy projects for nonprofit and cooperative community centers.
RE-volv’s model is simple. Money is raised through donations to seed a revolving fund that recycles the investment from one project to the next. Through a 20-year solar lease, community centers save money on their electricity bill while paying back the upfront costs and a small amount of interest to RE-volv. The lease payments are then reinvested into solar projects for other community centers, allowing the revolving fund to grow perpetually.
Last week, RE-volv received interconnection approval to turn on its latest project – a 22-kW installation at the Kehilla Community Synagogue in Oakland. With energy savings from solar power, Kehilla can devote more resources to better serve the community.
Community-based solar projects do more than just save the community money; they raise awareness about the benefits of solar. When people see their local community center go solar, it can change their perception of the technology and its viability.
This is an exciting moment for solar energy. As costs drop and innovative financing models like crowdfunding are implemented, solar will be deployed rapidly around the country. Let’s make sure that our vital community centers are able to take part in this transformation.