Legends Solar – Buy operating solar panels on commercial solar farms
legends.solar
legends.solar
A perusal of the LinkedIn profiles for the team shows a set of people with no relevant experience and probably no business running this kind of company. The low dollar amounts also emphasize this aspect.
I buy that.
If they really have a business model that can yield 8+% annual, assuming they get a cut, then they would raise real capital and not deal with randos. They don’t.
There are plenty of small retail investing companies that deal with small account sizes. Acorns, Robinhood, etc. come to mind. Over time, I'd hope that our average account size would be in the 10K+ range, but depending on CAC, small dollar would be fine.
Our innovation here is investment UX. The realized return might be a point or two north or south of 8% depending on the risk profile we go with - not far off course for the industry. Our current accredited investors get about 10%, but that's with tax equity incentives we might not be able to pass to retail investors.
We will be 100% transparent about our pricing model.
Kudos for letting the unaccredited have an influence on the future too.
Similarly, what do you think about the fact that solar panel manufacturers and all inbetweeners could "just" build their own power plants rather than sell to individuals?
This just looks like extra costs for actual running of sola plant. Compared to straight up existing structures for funding.
Your point is valid though. These places typically lend to companies that would struggle to get loans from banks. While I've worked for legitimate places that had this problem, you do need to ask why these places need crowdfunding. A lot of them are sole proprietors who want to start e.g. a food company. So it's still up to you as an investor to understand the risk and to go through company financials before lending. With personal loans you usually get details of default rates, etc.
There's a "wallet". They keep your returns until you ask for them and get them to pay out.
If you're really buying a solar panel, you're buying a depreciating asset. Someday the solar panel will wear out and your investment is gone. So the return has to cover the amount invested. An annual percentage rate is not the way to evaluate this.
What you buy does not seem to be resellable. It looks like you're stuck with it for the life of the hardware.
Who audits this thing?
This is almost exactly the classic situation in SEC vs. Howey, where investors bought trees in an orange grove. So this is probably an unregistered public offering.
We need enough scale to move a large (20M+) facility, but beyond that scale will only help insofar as bringing on follow on investments and referrals becomes a bit easier. We may also do some institutional stuff, but for the time being, we are 100% consumer focused and always will be.
Our innovation is to bring a consumer experience and true design focus to investing. Instead of treating retail investors like tiny little hedge funds, we design the product to match their expectations of what 'ownership' should be.
That said, for some there's the appeal of investing locally, presuming the panel is say intra-state. That type of investing pays different dividends (e.g., grow local tax base, grows local jobs, etc.) Some accept the trade-offs.
We've been working with accredited investors who are making 100K+ investments for entire solar facilities. We think of those transactions as our training wheels as we build out our software, financial knowledge, and design.
As we evolve to a larger scale we will certainly bring on specialists to support the product.
I would assume they plan to finance the large installations and then pay off the financing by re-selling the projects to retail investors in increments mapping to approximately 1 panel.
In theory they'd only need to keep enough working capital to fund installations until PTO (power turn on) at which point they could "sell" them to retail investors and turn over the capital for the next install.
In practice I'd be worried about what happens if (or when) the company goes out of business. Does my initial investment disappear and someone else now owns the solar installation?
This feels like an offer to become an investor in a risky solar install without any of the actual rights that come from being an investor in a solar install. If the company fails for whatever reason, your solar install goes to the company's investors and you get nothing.
A much better structure would be to operate as a solar holding and operations company and allow people to invest in the company (eventually publicly traded). This lets the investors keep actual ownership of the company and panels, not just some notional ownership on their platform that disappears the moment anything changes.
The way it's proposed here, they're breaking the traditional investment ownership chain and replacing it with some IOUs on the platform. What you really want is to own shares of the company that owns the solar installs, otherwise you get nothing and have no claim as a creditor when the business stops working.
On a general note, so, it seems people are coming up with lots of ideas to drop their investments on unassuming retail investors. Kind of makes sense, with potentially increasing interest rates, recovering their investments that might be affected by that sounds like a good idea.
I don't think that is a given - crowd funding can raise significant sums these days
We are 5 months old (though I was working on this solo for more than a year before that), and in that time I've built the team that will build this product.
Crowd funding is great as a sales vehicle (i.e. the people that invest in you will buy your product in the end). I don't remember a successful example where the crowd was purely there to invest.
1. I believe that man-made climate change is real and we should do something about it.
2. I want to limit/eliminate my own family's personal contribution to the warming of the planet for ethical and emotional reasons
3. I believe that solar is a "green" way to generate electricity, and at the limit if every house and building was covered in solar panels that would be a great world to live in
4. I want to help make that world a reality, and I'm not looking to maximize my ROI on the investment, it's not just about the money
5. I'd prefer much more solar energy production even if it's not the most efficient
6. I currently only have access to install solar panels on my own roof (which I'm already doing)
7. I think non-green energy production will only get more expensive, so solar energy is a decent diversified asset in a broader investment portfolio.
I've actually gone pretty deep in thinking about how I could do this, i.e. get a bunch of investors together and install solar panels on business roofs like schools, warehouses, etc.
I'm gonna request early access to this.
There isn't the investment/ROI angle – instead it focuses on putting up new solar by providing $1000-$5000 incentives to families considering rooftop solar. It focuses on lower income families and places that get most of their electricity from coal for maximum impact + additionality.
The way this is structured isn't great for retail investors. You're not really owning anything the way you would with a traditional investment. You're basically just giving them money and trusting that they'll continue to be in business long enough to pay it back. If they go bust, the panels and installations go to creditors and you get nothing. Great deal for their creditors, bad deal for you.
It's not classed as an investment for tax reasons and limits you to 120% of your estimated residential consumption. It will essentially remove the wholesale cost of electricity from my bill for 25 years - so protects me from price spikes like the past 12 months.
My town has a river running through it and would love to invest in a similar hydro scheme. The LCOE for wind/solar/hydro would seemingly always beat fossil fuels, given how finite the latter is.
[0] rippleenergy.com
Your speculation #7 notwithstanding, this kind of scheme is being targeted at retail investors [1] (instead of just accredited investors, sovereign wealth funds, pension funds, and the like) because it is more of a feel-good investment than something that makes financial sense. Firms with similar business models include Rally Road (equity shares in collectible cars). Similarities include the establish-an-emotional-connection tactic of identifying a specific panel or specific car.
This is a step up from Rally Road in my book — there's real earnings, it's not purely speculative — but from an investment perspective, you're only really involved because you're not as demanding as a serious investor (I expect rising interest rates have something to do with the shift away from accredited investors) and you are more vulnerable to this kind of feelgood pitch. Heck, you're competing with funding sources like a commercial loan, and for some reason you're winning?? That's a red flag.
You may see depressingly low returns. Read the prospectus end to end, understand the risks, and figure out how to do the math and properly discount a future income stream in a rising-interest-rate environment.
[1] (Elsewhere in this discussion: "We are currently working with accredited investors, but we are working to launch a product for retail investors.")
1. How long do I "own a solar panel"? Indefinitely?
2. What is the wattage of the solar panel and where is it located? i.e. what wattage will it produce consistently YoY? What power market?
3. What percentage fees does Legends take?
Frankly, #1 is the most important factor here by a long shot.
4. What contracts are in place to maintain the panel, and lease the space? What happens if the building decides to discontinue service. Will the solar panel be delivered to me (at what fee?) will the solar panel be re-placed on top of another building? (at what fee?)
5. are the devices insured against common forms of damage? (wind, hail, acts of humankind)
6. Can we implement at "DRIP" style reinvestment program where our ROI just funnels back into more?
You're promoting something you call "shares"[1], which promise to pay a dividend. Regardless of whether or not they can be resold, I assume your counsel has figured out a way that these aren't considered "marketable securities" within the meaning of the Securities Act of 1933, which would trigger all sorts of SEC scrutiny.
I assume you're familiar with the early business model of Prosper Marketplace and their struggles[2] with the SEC over a similar issue.
Does this fall under the Regulation Crowdfunding exception[3] or is there another loophole?
(This is not meant as criticism; I'm genuinely curious. I'm not an expert, and the legal landscape has quite possibly changed since I last researched this issue.)
[0] https://www.legends.solar/legal/terms-and-conditions [1] https://www.legends.solar/learn/actual-ownership [2] https://www.sec.gov/litigation/admin/2008/33-8984.pdf (PDF) [3] https://www.sec.gov/education/smallbusiness/exemptofferings/...
We've been building our beta with accredited investors under Reg D.
For others (like me) that haven't heard of Masterworks:
Masterworks creates a Delaware LLC issuer (taxed as a partnership) and files an offering of ordinary shares with the United States SEC under Regulation A. Each issuer will use proceeds from the offering to acquire a single work of art and title to the artwork will be contributed to a Cayman Islands segregated portfolio company for the benefit of the issuer. The issuer will have no indebtedness, no other assets and will conduct no operations other than relating to the ownership, maintenance and eventual sale of the artwork. The issuer is administered by Masterworks pursuant to an administrative services agreement that provides that Masterworks pays all ordinary and necessary fees, costs and expenses in exchange for membership interests in the issuer.
(from the FAQ at https://www.masterworks.io/)
The Regulation A amendments from the JOBS Act ("Regulation A+", circa 2015) are indeed more recent than my last look at this, so I can't comment further. The Cayman Islands domicile rubs me the wrong way, but that may be out of ignorance.
I wonder if we could do that for individual panels, particularly given deployment of module level Enphase micro inverters.
We answered those questions for accredited, for everyday retail investors it will depend on the solar facility we select and the financial structuring design.
a) Will the investor take on construction risk b) Will the facility be insured c) Who is the power customer (off taker) how creditworthy are they, and what are the terms? d) Will the financing include tax equity incentives and how will they be distributed.
These questions are all a matter of design and pragmatism. I want the financial design to be as considered as, and will integrated to, the user experience design.
How many panels does the average facility have?
I dont know if you heard of or followed sweater ventures. But this kinda feels like a similar niche, but w/ a solar angle instead of VC .
To be honest, in all odds the financial return is more likely to be dependent on factors like who the off-taker is, if the financing includes construction risk, if we are insuring the facility, etc than its physical location.
It’s funny how they try to disclose-away the problem at the bottom, even though they’re obviously worried about it enough to block retail investors (if a security only sells to accredited investors, you can basically do whatever you want.)
https://www.uclalawreview.org/here-comes-the-sun-how-securit...
No offers to sell or solicitations of an offer to buy securities or any other type of investment are being made or solicited by Legends Incorporated at this time.
I am very familiar with the Howey Test. From time to time, HN try to "hack" the Howey Test with various mental gymnastics, but always fail.
Real question: Could Legends Solar structure the investment like Cadence Real Estate? (Not a shill for them!) Cadence is basically mortgage-backed securities on multi-family properties for retail / mass affluent. They are operating for more than 10 years now. If their legal structure was not sound, I assume they would be enforced upon by SEC & friends.
I feel "direct green energy investment" for retail / mass affluent investors has huge untapped potential -- like 10s of billions of USD, maybe 100s. It makes me so frustrated that I cannot push ahead solar and wind projects with my own money. I want to transition power supply as fast as possible. Oh yeah, please add utility-sized battery installations to that list also. When I look at solar potential in India (see "Bhadla Solar Park"), it boggles my mind. There is SO much potential. Same for Middle East, North Africa, and Australia. All could use/export the electricity or convert water to hydrogen, then use/export.
>There may be lots of not-rich people who want to make smaller investments.
>So, let's chop them up into smaller segments to decrease that up-front cost!
>Oops, now it's a security, so you have to be rich in the first place to invest.
Talk about a Catch-22. Thanks, Roosevelt.
I would not say that is the problem we are solving. The problem as I see it is that most people have no idea what they actually own through their investment. We make it simple to know through great design and communication, that carries through from the financial structuring to the UI/UX, we are doing it all custom from the ground up.
We start with solar because its a pretty safe investment and people love it.
-Filthy unlanded tech scribe peasant.
-Have some savings, it is time to invest, but I don't have hundreds of thousands.
-Cannot afford land close enough to where I live (Tokyo) to fruitfully manage it.
-Due to legal reasons, there is a language barrier to the better ones among more accessible investment platforms I have found I can use.
I would love to be able to invest something like a couple thousand dollars in an endeavour such as Legends Solar. I would like to get into a real investment of some sort. Ideally without prohibitive amounts of red tape.
Thank you for your response.
As a buyer the key is to provide direct ownership of the panel, and a contract where I pay for a service to install / upkeep the panels, and a contract to sell electricity. In this case I am buying an asset, and my profits don't depend on greater or less input by the company.
The Howey test is: "a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party."
The key for this service is that my profit is not tied to the efforts of the 3rd party, it's tied to weather, and electricity prices.
Now they may structure it, such that it is a common enterprise, in that case it will pass the Howey test, and be a security. However if they sell the asset, and include a service agreement, then it doesn't pass the test.
Edit: as an example, when you buy crypto miners from Compass, and pay them monthly to host them for you. Compass is not selling a security, they are selling as asset that generates revenue, but profit is not tied to the effort of the 3rd party.
Edit2: Nevermind their site uses language like 7.3% return, shares, and cash dividend, so indeed it's a security and passes the Howey test.
There is a clever form of this where the panels are mounted vertically in fencerows running north-south. The "bifacial" panels collect both morning and afternoon sun, with room between for a tractor.
Another form is to mount the panels horizontally directly above the plants, so they get sun only in morning and afternoon, and are protected from harshest noon light, and also freak hailstorms. The panels are cantilevered out from both sides of fenceposts running down a row, with the tractor driving in space between rows and running its attachments under.
In pasture you can do whatever is cheap, so long as the herd can get to grass under them. The herd might also do better with less exposure, and they keep the weeds down.
Usually there is a little less room for the plants, per acre, but possibly higher yield anyway, and the field produces saleable power year round. The panels are not as close together as in a dedicated solar farm, but dual-use land is free, so there is no need to scrimp.
It is easy to find loud complaints in England about farms that have converted 100% to solar because it makes the farmer more money than actually farming. This seems like a good compromise.
But it also sequesters carbon, and if planted well can be entirely self sustaining.
So, neither is better, both are good. We need to plant more trees and place more solar panels.
I've been thinking about this kind of "solar condo" or "solar co-op" for a while. City people use energy, and might want to know that their personal energy usage is positively covered by solar.
I was paying extra for green energy from my local power utility (ENMAX) and it turns out, by green they meant they were burning biomass and using some form of carbon offset for it at the time I was paying. (https://www.enmax.com/home/electricity-and-natural-gas/easym...)
That's greenwashing and I won't have any of it.
I am getting panels put in this year; for some people that isn't an option.
It's also a good asset for people who are OK with lower returns if the investment slows climate change, or for people who want to make a bet that solar will be in higher demand in the future.
While I don't think this investment is effective either way, there is probably a market for people that want a more visible way to track their impact.
Matt Levine writes about this sometimes. One possible justification to invest in ESG is that you believe that investments that are relatively good for the environment (or whatever) will beat the stock market. Another justification is that it makes the cost of raising funds cheaper for companies that are good for the environment and more expensive for companies that are worse for the environment.
According to the latter theory, if it's working, you should earn less than the S&P 500. If you're not earning less, you haven't lowered the cost of raising funds.
(On the other hand, if a company is advertising a niche investment to small investors, they probably have a cost of customer acquisition that's going to be cutting even more into investment returns? Isn't their cost of raising funds going to be pretty high?)
But this does apply to most investments. Most investments that are looking for retail investors are scams. If they delivered ROIs better than or as good as the S&P they'd attract large sophisticated investors.
Joking aside, why would that be? They're creating an investment vehicle that pays 7% return subject to various conditions and taking some cut for themselves. You can't just assume that all investments are already fully sold on the market and no one can create new ones.
The important thing we hope to capture is the experience... it'll feel much more like owning a consumer product than an investment.
1. How are you defining risk in this context and comparing it to the stock market? There is no track record shown in the FAQs.
2. What is the "somewhat" in "somewhat predictable"? The 7.3% estimated returns seem to come out of thin air with no backing calculations to them.
3. How are you returning capital to investors? This is nowhere in the FAQ. Do I actually get what I put in back or am I buying an interest rate depending on the life of the panels hoping to break even at some point?
4. If there is no secondary market, how do I re-coup any of my initial investment? Am I locked in for life? Circles back to question 3, is the principal returned after a fixed amount of time?
5. Do I receive a K-1 and operating losses due to panel depreciation?
Similarities include physical depreciation, need for maintenance, insurance, importance of location, vacancy risk (vs bad weather), tenant risk (vs power customer), how each case is special snowflake, etc.
https://www.usinflationcalculator.com/inflation/electricity-...
One "product designer", one former art gallery manager, and one embedded engineer with a couple years of experience.
Advisors include another "product designer", someone who describes themselves as a "storyteller film maker", and someone in the solar financing space. At least there's one person in here with semi-related solar financing experience.
Of course, it's entirely possible for a scrappy team like this to execute on a startup if they can get all of the right pieces aligned. I do get skeptical when the founding team and advisors have more "designers" than doers, though. Seeing the founder have "summer design associate" as a title within the past few years doesn't really inspire confidence in a capital-intensive solar company.
Would love to see them succeed! However, I would need to see some proof that they can execute before I'd even consider touching this. This is the kind of business where you lose any claim to your solar panels the second they go out of business, and many lenders are happy to prey on those scenarios.
The numbers on their example page also raise a huge red flag that they don't seem to understand the economics at all: https://www.legends.solar/get-early-access $250 as an estimated investment for a panel they show as 350W is way below the installed cost that anyone is pulling off right now. I'm guessing they picked random numbers to collect interest to fundraise with, not from actual models.
Honestly, I'd much rather see a corporation set up as a publicly-traded company that builds solar installations and pays out a dividend to investors. That keeps investors aligned with the company and maintains their claim over the installations. The way this is set up feels like it's designed to strip rights from individual retail investors by funneling their investment through the platform while someone else owns the company.
We've been placing 100K+ solar facilities with accredited investors for a few months now as we've gotten our private beta version off the ground. We've also been working with more experienced finance partners to structure future investments available on Legends Solar.
My wonderful cofounder hails from the art world, and has been helping to place our accredited product. She will be key in helping Legends create a resonant brand with cultural currency as we grow and evolve.
Before we raise seed or launch our retail product, we will bring some project finance experience in-house. Recruiting has been easy because people outside of climate love our brand and mission, and people inside of solar finance are often finance professionals who rarely have an outlet to share what they do for the world and the industry publicly. (You should see us as solar finance conferences, we're the bell of the ball - not kidding, we found many of our finance partners there).
I wanna push back on the idea that designers are no 'doers'... 'Doing' is an ethic, not a discipline, and there are plenty of examples of designers rising to be successful entrepreneurs (AirBnB, et al.).
> She will be key in helping Legends create a resonant brand with cultural currency as we grow and evolve.
Brand is no doubt important, but execution is what makes a startup work.
> I wanna push back on the idea that designers are no 'doers'... 'Doing' is an ethic, not a discipline,
Hard disagree. Plenty of startups have risen to fame on impressive branding only to fail because they treated execution as an afterthought. Execution is at the core of every startup, and it's certainly not just a mindset. Someone has to execute.
> there are plenty of examples of designers rising to be successful entrepreneurs (AirBnB, et al.).
True! But in the startup world I've also seen many, many founding teams who thought they'd design the product and then figure out how to execute it later using future hires.
It's basically a meme: Usually "we have it all figured out, we just need a few engineers..."
It doesn't work out. Getting someone on the team who knows how to execute should be the top priority.
I am running things fairly conservatively, the marketing site is the tip of the iceberg. We need to prove retail demand to get off the ground but the other pieces are also coming together (project finance, deal flow, transactions, engineering, etc).
Per 'doers' - my point is that 'doing' is not taught in engineering school or consulting or Goldman Sachs any more than it is in product design. In that sense it is an ethic, not a credential or professional discipline. I think we are more or less simpatico here.
(Accredited investor with solar experience here) - On a commercial scale that's 1 or 2 installs. Good for getting your feet wet with solar but what you're proposing is a different game entirely.
> Per 'doers' - my point is that 'doing' is not taught in engineering school or consulting or Goldman Sachs any more than it is in product design. In that sense it is an ethic, not a credential or professional discipline. I think we are more or less simpatico here.
"Doing" is definitely taught in engineering school in the context of doing engineering things.
I don't think anybody here doubts that you can "do" designs. The point is that the type of "doing" this startup needs has little to no overlap with the founders' experience. It's not enough to make hand-wavy claims that "doing is an ethic". Someone still has to do all of the business things and execution.
To me, the most important thing would be assured that this investment truly creates new panel installations vs just being an arbitrage play on reselling existing solar capacity. Is there anything about this program that ensures the solar panels create net new capacity?
For our first offerings, we will likely purchase existing facilities or contribute financing to new ones. Over time, we hope to select facilities where our member's additive benefit is more clear.
The notion of tapping into unused space (commercial roof tops) is genius. Give companies enough of an incentive and they'll happily join. Especially since the capex is basically taken care off by others. The main challenges would be related to scaling operationally and sourcing the hardware.
Smart but in the end it's just a way of owning shares with limited rights in a company. The share sales are used for capex. The capex drives the dividends (through power sold). Presumably that's a better deal than what private home owners would get. And of course the majority share holder gets their cut as well on top of service fees and what not. So, win win.
Of course the question is what happens when things don't go so well (e.g. bankruptcy). In principle the same as with any other kind of investment probably. The devil is in the details. But this kind of cooperative model works very well in other sectors. E.g. milk producers commonly pool resources and some regional banks operate like cooperatives. So, it's not a strange idea.
And this could be a great solution for people that would like to get some clean power but maybe don't have a place suitable for solar panels. Otherwise, it's a normal investment with risks and rewards. On paper, the notion of buy panels and sell power seems like it should be a straightforward one. But of course the devil is in the details with the terms and conditions. The sales pitch is great though and I could see how this would work well.
Say I want to invest in solar to generate revenue to pay for charging my EV driven 15k miles a year, or about 3750kWh (@250Wh/mi).
In my area, that will require about 2.6kW of PV, which at local rooftop PV rates of about $3/W would be $7800 pre Federal tax credit, or $5772 after the Federal tax credit.
Meanwhile, 3750 kWh purchased from my utility will cost me about $1000/year at today's electricity rates. So the payback time for my hypothetical rooftop PV array is about 6 years, give or take, after which I get free miles.
If I instead chose to invest in a group solar scheme like this, what is the upfront investment required to generate a guaranteed $1000/year. Extrapolating from the 7.3% rate of return on your website (the tool only allows 10 panels to be selected), it seems line that would require a $13698 investment.
For my rooftop solar example, the rate is return is 17% annualized, and the investment is $5772.
Other questions:
After 25 years when the panels are performing at 85% capacity can I keep using them?
Can I claim depreciation on the panels, since they are a purely depreciating investment (both in physical and in financial terms)?
What if a worker accidentally damages my panel(s). Does your insurance pay for that or mine?
My questions are sincere, not an attempt to shoot down the idea.
I'd much prefer to own PV in a field somewhere instead of more attached to my house (I already have enough PV to provide for domestic electricity), and not much more roof space.
If you need electricity in an area with high electricity prices, and you're getting a tax credit, and you're cutting out the middleman, it would be expected that a local system would have a better rate of return.
We are going to structure the investment so that your returns will be post tax-equity and post-depreciation. We would be opening up a can of worms if each retail investor's return were dependent on their particular tax situation (although we are now working with accredited investors who are availing themselves of MACERS and ITC).
We could never guarantee any amount of generation since this is an equity investment, but to generate 1K worth of power on a facility that returned 7.25% would require about a 14K investment. Of course, if you really wanted to get technical, you would also incorporate the dirtiness of the grid you were selling to into your equation. I hope to one day build those types of tools, too.
For sure, if you can build rooftop solar or use some sort of community solar arrangement, you should do that first before considering Legends Solar - it will likely have a strong financial benefit. But you can only offset as much as you consume using those tools, so if you still have an appetite or would like to offset your non-utility consumption, you might still consider us.
For people who live in the city or who rent and don't have access to those tools, or people who like a good product and just want to understand what they actually own through their investment, you might consider us sooner.
Sorry I can't answer with more detail - I really love quantifying and contextualizing the carbon you'll offset and financial returns you can earn in detail, but I'll need to break out my spreadsheets to really get into it.
Also, will you be legally proprietary of said panels?
Ideally yes, you will own a real individual panel. But we may settle on a different structure if necessary from a regulatory or tax perspective (its a long story).
If it is structured as a share of a collective, it might be easier to take those expenses out.
You could even do something crazy like tokenize the panels themselves and let people buy/sell rights to them on an open market. Be the first company that makes NFTs not a joke.
If this is appealing to you, you might also want to check into your power company's offerings. It may be possible to buy carbon-neutral power directly for a relatively small fee. This is what I do, and it costs about $10-12 per month.
(Buying "carbon-neutral power" means that the power company guarantees that the combined usage of everyone on such a plan is less than combined carbon-neutral power generation. It incentives power company investment in carbon-neutral sources.)
E.g. "cloud mining", "fractional share in high value collectible games" were all nonsense.
After all, maybe the ruthless SEC is there for something - even if I don't agree with all that "accredited investor" gatekeeping that prevents competent individuals form getting a tiniest slice of the VC windfall.
Often new solar facilities come with tax benefits (ITC and MACERS depreciation) that the power consumer is unable to monetize - this is particularly true of non-profits and other businesses with very low tax bills. So they sell their solar facility to a private investor who is better able to exploit the tax benefits (i.e. people and orgs who have a lot of highly taxable income).
Legends can come in either at the beginning of that life cycle by selling off the tax equity to private investors and the panels themselves and the revenue they generate (i.e. sponsor equity) to retail investors. We can also come in after the tax benefits have been exploited (5-7 years after commissioning) and purchase the solar facility from the tax motivated investor.
In the future, we plan to bring project finance in house and do some origination work, as well. We are still at the start of our journey.
Best of luck and I hope you’re enjoying your 15 minutes of HN scrutiny ;)
One of the problems with mass solar panel deployment is that the sun only shines during the day, but people want electricity at night. Batteries are expensive, so initial deployments often rely on slack in the system.
Once you are at a substantial part of the production in an area, that won't work.
In what ways is this worse than that?
Is this something I can do as a retail investor? What sort of minimum investment is needed?
We are different from investing in a utility for two reasons. First, you'll own simple direct ownership in a panel, not in an entire organization and all its bureaucracies and stakeholders. I want it to be as close to a consumer product as possible, to feel personal, not like an investment. Second, you panel will slowly depreciate over time and eventually be liquidated where a utility is hypothetically perpetual.
Aside from that, utilities typically pay $.04 or so for power generated. We'll likely have a behind-the-meter arrangement with a commercial power purchaser (like a factory or hospital), which can boost the return but be somewhat more risky.
None of them, to the best of my knowledge, are currently planning on being 100% solar. It's unlikely, although a 100% renewable company is pretty likely to either now exist or happen shortly. Hydro-Quebec is, courtesy Wikipedia:
hydroelectricity (96.78%)
wind (2.16%)
biomass, biogas and waste (0.75%)
nuclear (0.19%)
thermal (0.12%)
For the time being, we want to keep our investors our of construction risk and tell a super simple story through our design. More to come though.
A product I'd jump at is if you pay me back in electron volts end-to-end, wherever I am. Is that feasible? Say I live in an apartment block. I really want to go solar, but have no roof or land. I'll pay you to erect and manage 1kW of panels out on the farm for me and I get back, say 750W (you skim 25%). But I get it through my utility company (it just comes off my bill).
We are still in an early stage of creating the financial product, and the realized returns will be a function of the risk profile we choose (i.e. will there be construction risk, insurance, who is the power purchaser, etc.)
Don't worry, you'll get a detailed financial profile/pro forma before you have to make a investment decision.
As with any investment, we can't make claims about financials until everything is finalized and vetted. That will have to wait until we have a pro forma ready to go. Soliciting 'indications of interest' is a fairly common practice across all industries.
To be clear, we are already financing larger $100K+ deals with friendly investors in our network as we design and engineer a product for a larger audience.
I think about it as the opposite of securitization. We are designing a produce to have as few layers of abstraction, complexity, and bureaucracy as possible so that it feels like owning a real product, not like an investment.
Useful life of panels, i.e, years required for their output to fall to 80% of full output is in the range of 20-25 years.
After the break even period, most of the cash flow is profit.