What Is Solar Marketplace?

CF-IconSolar CrowdSource’s Solar Marketplace can work for you in three different ways, depending on if you are a: local government/community/nonprofit, developer or crowd.

You may have the opportunity to host, buy or invest in solar energy. Any which way you slice it, you’ll receive financial benefits—and the environment will thank you, too. Here’s how it works, in a nutshell:

The Community

Wish

A local government or non-profit wants to go solar, but it can’t take advantage of valuable tax incentives that make solar more affordable.

Solution

The community organizer signs up to host solar panels on its property and purchase the electricity it produces from a developer who owns and maintains the panels.

Benefits

  • No out-of-pocket or maintenance expense
  • Reduces carbon footprint
  • Saves money on power bill
The Developers

Wish

A developer wants to invest in a socially responsible way and can use the valuable tax incentives that come with solar.

Solution

The developer signs up to install and maintain solar panels on a local government or non-profit property and sell the electricity it produces for a set term.

Benefits

  • Receives tax incentives and recurring revenue stream
  • Access low-cost financing through our crowdfunding
  • Reliable, long-term off-taker
The Crowd

Wish

The crowd wants a local community solar project to become a success, share in the community benefits, and get a return on their investment.

Solution

The crowd signs up to lend money to the project and gets paid back from the clean, renewable energy it produces, and additionally earns a return on the investment.

Benefits

  • Makes socially responsible investment
  • Earn a rate higher than CD or savings
  • Contributes to cleaner planet
  • Promote local economic development

How It Works

Solar CrowdSource connects both communities seeking savings and a clean energy alternative with developers seeking good socially responsible investments and tax incentives, as well as solar developers seeking to finance their solar projects with a  crowd of qualified investors looking for steady returns.

As the solar project produces clean electricity, it generates revenue by selling power to a Georgia community/local government/nonprofit, which also serves as a host site for the solar equipment.

As the project earns revenue, investors are paid back with interest.

Through the Solar CrowdSource Solar Marketplace platform, the crowd makes a loan to the developer (project owner), and your loan is repaid from the payments made by the local community/nonprofit property under a Power Purchase Agreement (PPA).

Solar Marketplace 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 SEPA?

A SEPA (Solar Energy Procurement Agreement) is Georgia’s version of a power purchase Agreement. With a SEPA, a solar developer will own and maintain the solar system and sell the electricity it generates to a host-customer. The host-customer commits to purchase power at a rate per kilowatt-hour usually less than what they currently pay the utility over a predetermined period of time. The host-customer can “lock in” the electricity rate as a hedge against rising utility rates moving forward. The final SEPA terms are negotiated between host-customer and developer directly.

SEPAs are great for government and nonprofit entities that are unable to monetize the tax incentives that come with solar. SEPAs also work for commercial entities that want to go solar but do not have the tax appetite to use the tax incentives that make solar more affordable.  The developer will take advantage of the tax incentives and pass the savings to the host-customer through a reduced SEPA rate.

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.

Disclosure Documents

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.

SolarCrowdSource is not a broker/dealer or an investment adviser, and makes no recommendation as to investment in any securities. Nothing contained on this website constitutes an offer of securities to any person who is not a legal resident of the State of Georgia, and no sales of securities will be made to persons who are not legal residents of State of Georgia. Neither the Securities and Exchange Commission nor any state regulator has passed upon the merits of or given its approval to the securities, the terms of the offerings, or the accuracy or completeness of any offering materials appearing on this website