In 2011, when Michele King was the science coordinator at Pinnacle Charter School in North Denver, she was scouring Colorado for cheap solar panels — and not having much luck.
King, a former renewable energy scientist, knew that a solar installation on Pinnacle’s rooftop would help her budget-crunched school save money on their utility bills. But she also knew that Pinnacle couldn’t bear the high upfront costs of constructing a solar array.
“I was just about at my wit’s end,” says King. “No matter how we tried, we just couldn’t pull it together.” A local solar developer had designed an enticing installation for Pinnacle’s roof, but the problem remained: Who would pay for the panels?
Enter Mosaic, an Oakland, Calif.-based startup that’s harnessing the power of the crowd to transform clean energy financing. Part Kickstarter, part bank, Mosaic collects online investments, some as small as $25, to fund solar panels for buildings, like Pinnacle, that otherwise couldn’t afford them. The solar array makes money by selling electricity to the building and, in Pinnacle’s case, to the local utility; Mosaic takes a small cut and pays the rest to its online investors, typically yielding returns of 4 to 7 percent.
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Through Mosaic and its partner Distributed Sun, a Washington, D.C.-based solar financier, Pinnacle got its panels. Over 400 individuals invested in the 662-kilowatt installation, which over its lifetime will save the school up to $1.6 million, prevent over 50 million pounds of carbon dioxide from entering the atmosphere, and provide returns of around 5 percent to investors. (While Mosaic’s few critics complain that the company’s model for generating revenue is overly reliant on solar tax credits, businesses in every sector of the energy industry, including fossil fuels, benefit from government incentives.)
Yet the project’s greatest beneficiaries might be Pinnacle’s students: The school has incorporated the panels into a renewable energy curriculum that’s considered among the country’s most comprehensive.
“If you’re persistent and creative, these projects can happen,” says Alex Blackmer, founder of The Atmosphere Conservancy, a Colorado nonprofit that helped connect Pinnacle and Mosaic. “And having Mosaic in the picture is a tremendous help.”
Pinnacle Charter School is just one of many institutions whose solar dreams Mosaic is making a reality. The company, founded by longtime friends Daniel Rosen and Billy Parish in 2010, has already harnessed the power of the crowd to raise more than $5 million and successfully fund 19 projects. “We see Mosaic as both a business model and a movement,” says Rosen, the CEO to Parish’s president. “The mission is to be the No. 1  investment platform in the clean energy economy.”
That economy seems to get more crowded by the day. Over the last decade, companies like Sungevity and SolarCity have dramatically increased the availability of residential solar by allowing homeowners to lease rooftop arrays, instead of forcing them to buy panels outright. The plummeting cost of panels, combined with the ascent of the solar lease, has some boosters dreaming of a distributed energy landscape on par with Germany’s, where individuals and farmers own more than 50 percent of renewable energy. On the investment side, a company called SunFunder operates as a renewable energy iteration of the online lending platform Kiva, dispensing crowdfunded loans to small businesses in developing countries — although unlike Mosaic, SunFunder doesn’t yet offer returns on investments.
Rosen’s own evolution to solar entrepreneur began as a climate-change-obsessed teenager, at Ridgewood High School in New Jersey. “I remember seeing my first solar system and feeling enamored,” he recalls. “The idea that you could create power anywhere felt magical to me.” Like Michele King years later, Rosen began lobbying his school’s administration to install a solar array. But without third-party capital, the school couldn’t afford the panels — a lesson that Rosen, now 27, says proved “very influential” in Mosaic’s inception. (Ridgewood got panels 10 years later, thanks to financing from a local utility.)
After high school, Rosen moved to Arizona to work with Wahleah Johns, founder of the Black Mesa Water Coalition, a Navajo organization in Flagstaff, Ariz., that was fighting water pollution caused by coal-burning power plants. He also reunited with an old friend: Billy Parish.
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By 2007, when he and Rosen reconnected, Parish was already a rising star in climate-change activism circles. He had dropped out of Yale University in 2002 to form a youth climate group called the Energy Action Coalition; in the intervening years, he’d campaigned for green jobs, started a green music label and written a book on socially conscious entrepreneurialism. “Billy’s a genius at building movements,” says Rosen, who first met Parish during his campaign to secure panels for Ridgewood High. “He intuitively understands how to connect different segments of society into powerful alliances.”
Parish had come to Arizona to support Black Mesa and Johns (whom Parish would soon marry) in their efforts to replace coal plants with wind and solar. The challenge was that tribes like the Navajo couldn’t take advantage of the clean energy tax credits that make solar and wind attractive investments. Nor, Parish realized, could schools, churches or nonprofits. Instead, most clean energy was financed by big banks and high-rolling investors.
“Tribes wanted to see a different paradigm for energy development, where they weren’t just leasing their land for pennies on the dollar, but where they were true owners of clean energy,” Parish says. Inspired by Black Mesa’s green economic development efforts, the seed of Mosaic began to germinate. “We realized that there was actually a broader need — that we should all be able to develop and own renewable resources.”
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That epiphany has brought Mosaic to some surprising places. During the company’s early days, it concentrated on providing panels to local groups with social consciences, like community centers and nonprofits. But as Mosaic’s pool of investors has grown, so has its reach: In 2013 it funded solar installations at convention centers, apartment complexes, bee farms, Ronald McDonald houses and a military base in Fort Dix, N.J. (While Mosaic’s projects are open to investments from the general public in New York and California, participation in other states is still limited to accredited investors.)
Mosaic’s diversity of projects appeals to investors like Brian Bell, an investment manager in Dallas who helped fund the Pinnacle Charter School solar effort. “Because it’s project-based, your investment is much more tangible than it would be in a mutual fund,” says Bell, who adds that his two young daughters were a powerful inducement to invest in both a school and clean energy. “This is a way to combine good financial sense with principles that I think are important.”
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