E-commerce visionary Elon Musk and British punk-fashionista Vivienne Westwood see eye-to-eye on a new wave in clean energy: You need to find investors online.
Musk is chairman of SolarCity Corp, a US provider of solar energy to homes and businesses that plans this year to start seeking individuals to invest in solar projects via the Internet. Westwood is backing Trillion Fund, a web platform that seeks cash for wind and solar plants in the UK.
On both sides of the Atlantic, clean-energy promoters are developing crowdfunding websites that promise to overcome investor skepticism about whether they can earn regular returns. Barely on the corporate radar three years ago, crowdfunding has mushroomed beyond social causes, film projects and garage start-ups toward companies with steady cash flows.
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We can’t leave this kind of clean investment up to governments, which are cutting their own debts and are only worried about winning the next election…Nor can we leave it up to investment banks, with their short-term profit motivations
British punk-fashionista Vivienne Westwood
“With clean energy, you’re now seeing characteristics of actual investments — specific returns with defined lengths of payment and professional management,” said Nathaniel Bullard, an analyst with Bloomberg New Energy Finance in Hong Kong. “You’re not just giving to money to something you believe in.”
That has attracted the interest of wind and solar farm developers, who already typically provide performance guarantees or availability guarantees. It’s also drawn the attention of researchers and regulators.
Britain’s Financial Conduct Authority is working up proposals to regulate the market and protect consumers beginning in April. The European Commission is due to publish a report on the issue today in Brussels. Bloomberg New Energy Finance holds a seminar on crowdfunding in New York on April 8.
American probe
Across the Atlantic, the US Securities & Exchange Commission in October proposed measures to regulate the crowdfunding market with rules set to be completed this year.
Many of the funding sites are following Oakland, California-based Mosaic Inc, which entered into the clean-energy funding market in 2011. SolarCity, which bought online lending technology developed by Common Assets LLC, has a green track record with professional investors: It was the first US company to complete a securitisation backed by distributed rooftop solar assets.
Even with this new professionalism in the market, the green pitch is still being targeted to investors who are simply skeptical of The System.
“We can’t leave this kind of clean investment up to governments, which are cutting their own debts and are only worried about winning the next election,” Westwood, who’s sold designer clothing under her own label for about three decades, said in an interview. “Nor can we leave it up to investment banks, with their short-term profit motivations.”
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