Note: this is a sample campaign page only to demonstrate some of the functionality available through Solar CrowdSource's Solar Marketplace.
UGA is going solar and we need your help to make it a reality!
The University of Georgia has come to terms with a solar development company to construct a 100kW solar canopy on one of it's parking lots together with electric vehicle charging stations. This project will bring shade to 50 parking spaces and UGA will enter into a power purchase agreement with the solar developer to purchase the energy generated from the solar panels for the next 20 years. Motorist get shade from the hot Georgia sun, the school saves money, and we all breath cleaner air. Now that's a win, win, win!
UGA is giving Georgia residents a chance to participate by investing in the solar project through this campaign. For a limited time, up to half the cost of the system will be financed through Dawg Nation and participants have a chance to receive a return on their investment. Participants can invest as little as $25 up to $10,000 and get paid back from the energy generated over a term - plus interest!
How it Works
The solar developer will purchase the system and have it installed. Once it's passed inspection, interconnected, and generating electricity, participants will begin to receive periodic payment of principal and interest over the term of the loan. The solar developer will issue a promissory note in compliance with the Invest Georgia Exemption, which allows accredited and non accredited Georgia residents to invest in certain types of companies or projects. Participants in this campaign are not purchasing parts of the solar array but rather investing in the debt portion of the project.
See a prospectus of the opportunity here [link] to find out more about the risks associated with this investment and review important paperwork.
The Project FAQs
Who can participate in the Solar Marketplace?
Solar CrowdSource projects involve a project owner (Developer) and a nonprofit entity (Customer) located in Georgia. The Customer acts as both the host site (the location where the solar equipment is installed) and the solar customer. The Developer owns and maintains the actual solar equipment on the Customer’s property, while the Customer buys the power generated through a power purchase agreement (“PPA”). The Developer typically owns the project’s assets (equipment, contractual right to receive payments under the lease or PPA) through a special purpose entity (“SPE”). If the Developer chooses, it can crowdfund a portion of the cost of the project through the Solar CrowdSource platform.
How does a Solar CrowdSource solar project work?
A nonprofit (Customer) contacts Solar CrowdSource to get started. At no cost, we will take a look at your last 12 months utility bills and your property to determine how much solar you need and the best place for it to go on your property. Together we will determine how much solar energy you want to purchase for how much per kilowatt hour. If you are a good candidate for solar, we grant you access to a free landing page for you to list your project on our peer-to-peer platform so Developers can see your project and determine if owning and maintaining a solar array on your property and selling you the energy is a good investment for them.
Developers sign up with Solar CrowdSource to browse projects to see if any are of interest. Some Developers may prefer to only invest in projects located within their community. Other Developers may want to invest exclusively in school projects or church projects, etc. If a Developer likes a project, they will let us know so we can get the parties together to discuss details. Developers can pick their own solar company to install and maintain the solar array or choose from one of our approved installers.
The Developer can then finance up to 50% of the cost of the project if it wants to diversify its investment through Solar CrowdSource’s intrastate equity crowdfunding platform. The crowd investor can lend as little as $25 up to $10,000 and will get paid back from the energy generated from the solar array. The Customer pays the Developer for the energy and the Developer pays back the crowd through a fully amortized payment schedule, plus interest. The Developer signs a promissory note to each crowd investor dictating the payment terms of the loan
Can the Developer finance more than 50% of the cost of the project through the Solar Marketplace?
The short answer is no. Solar CrowdSource limits the amount to 50% for several reasons. First, we want to make sure the Developer has “skin in the game” and requiring the Developer to invest at least 50% of its own money in the project shows the Developer is vested in the project and more likely to ensure the project will become a success. Secondly, limiting the Developer to 50% debt enables positive cash flow so energy generated from the solar panels is enough to service the debt and maintain the system. Finally, by crowdfunding up to 50% of the cost of the project, the Developer can receive a faster payback (approximately 3 to 4 years), assuming tax incentives are used efficiently. This 50% equity and 50% debt model is based on a 4 to 6% interest rate and 10- to 20-year term depending on the how much the Customer can afford to pay for the energy.
What is my expected rate of return if I lend money to a community project through the Solar Marketplace?
Rates of return will depend on several variables unique to each project. That said, Solar CrowdSource expects interest rates to be in the range of 3.5 to 7%.
Why does Solar CrowdSource only work with nonprofit Customer sites?
The Solar Marketplace is designed give nonprofits access to affordable renewable energy while encouraging the community to participate at the same time. Whether it be a school, church, or municipal community center, nonprofits usually come with their own community that have a vested interest in making the switch to clean energy while saving money. The nonprofit reduces its electricity bills, the Developer makes a socially responsible investment, and the crowd earns interest on its loan to the Developer. Meanwhile, a multiplier effect takes place where communities are investing in communities; generating economic development, creating jobs, saving energy costs, and reducing carbon emissions. A virtuous circle!
What is a Power Purchase Agreement?
A power purchase Agreement (“PPA”) is a contract under which a Customer purchases power generated by the solar equipment. Under a typical PPA used in a Solar CrowdSource solar project, the Customer commits to purchase power at a rate per kilowatt-hour less than what they currently pay the utility, on a monthly basis over a twenty-year period. Alternatively, the Customer can “lock in” the electricity rate as a hedge against rising utility rates moving forward. The final PPA terms will be negotiated by Customer and Developer directly.
What role do tax incentives play in Nonprofit Solar CrowdSource projects?
Until recently, it was difficult for nonprofits to go solar because the tax incentives used to make solar more affordable are not available to non-taxpaying entities. With the recent passage in Georgia of the Solar Power Free-Market Financing Act, now nonprofits can go solar by hosting a system on their roof to a for-profit entity that can use the tax incentives and pass the savings to the nonprofit through the PPA rate structure. While new to Georgia, this free-market initiative has fueled the growth of distributed generation in other states for several years. There are some restrictions as to how the tax credit can be applied. Solar Crowdsource encourages individual Developers to use a special purpose entity such as a single-member LLC. Developers are highly encouraged to seek professional tax advice to determine how the 30% tax credit can be applied to its individual situation.
Is money raised through the Solar Marketplace used to build the project?
No, money raised through the Solar Marketplace only vests after the project is built and placed in service. It is the Developer’s responsibility to either pay for installation itself or obtain construction financing (Solar CrowdSource has preferred solar construction finance companies available upon request). After installation is complete, approvals are obtained, and the project is generating revenue, funds will be disbursed to the Developer and payments begin. Having the funds committed prior to construction helps ensure the success of the project. If the project is not built and placed in service for some unforeseen reason, the funds are reimbursed to the original lender.
Solar Power Notes
Each investment is made by issuance of a promissory note from the Developer. The note is a written promise to pay a specific sum of money over a fixed term. Each note states how much was loaned to the project and the investment terms.
Each project is described in detail in the offering’s disclosure documents that are prepared in accordance with the Solar Marketplace campaign. These documents contain important information regarding your investment.
Who can invest through Solar CrowdSource’s platform?
Currently, only Georgia residents are permitted to invest in solar projects on Solar CrowdSource. But investments are open to ALL Georgia residents regardless of accredited investor standards. Georgia residents may invest as little as $25 up to $10,000.
Is there a fee associated with investing on Solar CrowdSource?
There is not a fee associated with investing on Solar Crowdsource. Solar Crowdsource makes a listing fee by connecting community projects with Developers and charges Developers a flat platform fee to raise debt through a Solar Marketplace campaign.
Can I re-sell my investment?
You are permitted to immediately assign your interest in the Solar Power Note to other Georgia residents in the first 9 months, provided that the Developer permits such assignment. After 9 months (again, only to the extent that the Developer permits), you can sell your note to anyone regardless of state residency. However, please be aware that a secondary market may not exist for Solar CrowdSource notes, which may make the chance of liquidity (apart from debt payments) remote.
How much can I invest on Solar CrowdSource?
Non-accredited investors (individuals making less than $200,000 annually or with less than $1 million in assets, not counting primary residents) can invest up to $10,000 per campaign. There is no cap on investment for accredited investors.
How are borrowers screened for quality?
Developers on Solar CrowdSource have been vetted and satisfy our basic criteria required to develop the project, maintain the system, and service the debt. Nevertheless, investment in any solar project involves risks, including the risk of the entire loss of investment. Solar CrowdSource makes no recommendations as to the suitability of any investment and makes no guarantees related to any campaign. Please review the disclosure documents associated with a particular campaign for specific risk factors that must be considered before investing in any solar project.
How often do I get payments and when do I get all my money back?
Payments of principal and interest on each loan disclosed in the Solar Promissory Note. Typically, the Developer will make monthly or quarterly payments to investors throughout the term which is currently between 10 to 20 years from the date the note was issued.