360° Coverage : This Platform Helps Nonprofits Pay For Solar Power

2 Updates
This Platform Helps Nonprofits Pay For Solar Power

This Platform Helps Nonprofits Pay For Solar Power

Jan 18 2014, 1:06pm CST | by

Small nonprofits have a notoriously hard time financing solar power projects. Now CollectiveSun, a San Diego-based startup, has a plan for making it easier to find funding. Why the problem?...

Filed under: news

 
 
 

32 weeks ago

This Platform Helps Nonprofits Pay For Solar Power

Jan 18 2014, 1:06pm CST | by

Small nonprofits have a notoriously hard time financing solar power projects. Now CollectiveSun, a San Diego-based startup, has a plan for making it easier to find funding.

Why the problem? Basically, churches, schools and other such places may have a heap of assets. But they can’t take advantage of most of the federal and state tax incentives for solar power, thanks to their tax exempt status and lack of tax liability.

What’s more, because they’re small, the projects they need to finance are similarly modest in size. Plus they’re riskier bets than large nonprofits, like universities. So banks and other financial institutions tend to avoid giving loans to these organizations. (Think about it: a church defaults on a loan and the bank has to foreclose on the property. Can you spell public relations nightmare)?

About two years ago, Lee Barken, an accountant and LEED-certified professional , came up with a solution. He would create a company offering a platform and marketplace for nonprofits, investors and solar installers, aggregating investments to help fund small solar projects in the $50,000 to $1 million range.  Then, the business could use the money to install solar systems and sell power at a discount through a power purchase agreement (PPA).

In case you don’t know, a solar power PPA is a contract through which a developer takes care of everything from financing to installation and more on a customer’s property at a discount or at no cost. The developer then sells the power to the customer and receives not only money from the arrangement, but also, since it’s not a nonprofit, any tax credits that exist.  “It’s like buying the milk instead of the cow,” says Barken.

(Small businesses also have trouble getting financing, because they’re not lucrative enough for banks to go through all the labor-intensive due diligence and paperwork, a problem that BlocPower, another solar-power social enterprise that I recently wrote about, seeks to address).

Investors, who are paid back in annual payments over ten years, are meant to come from the nonprofit’s community–not big honchos, but people who care about the organization and are willing to make small investments of as little as $25. “This is only possible if the community steps forward to back the project,” says Barken. To make sure that happens, CollectiveSun also does a lot of behind the scenes work, helping with marketing campaigns and the like.

By doing so, Barken figures the nonprofits will be able to save on energy expenses and, ultimately, have more money to spend on their mission. What’s more, they also can boost community involvement–a lot more than by, say, sending out a letter asking for donations. Still, this isn’t risk-free. If the nonprofit were to default, then investors would lose their money.

Barken got the idea when he was working on industrial renewable energy projects. It just didn’t make sense that the only way small nonprofits could convert to solar power was to spend more money on their electricity than before. “I got more and more frustrated that nonprofits were being left out,” he says.  “The tax benefits–that’s the ball game, the difference between a cost-effective and non cost-effective project.”

For the first 10 years, CollectiveSun or a designated third party own the solar equipment. About half of the investment is paid back after the first year, since Barken expects many investors won’t be the usual suspects, but low-income people. After ten years, the nonprofit can buy it through a four-year arrangement with a fixed rate.

Money from such a sale is where CollectiveSun will make the most in revenues, according to Barken. It also charges installers a 3% origination fee and investors a .2% servicing fee.

It took Barken a good two years struggling with legal and accounting complexities before he could officially get the social  enterprise approved.  Last December, CollectiveSun launched its first pilot for TERI, an Oceanside, Cal.,  nonprofit that, among other services, operates residential housing for developmentally disabled adults. They raised about $445,000 from about 27 investments from $25 to $10,000 and are in the process of a second pilot.

Now, Barken has about 30 proposals from other nonprofits in the pipeline. “There are a lot of nonprofits out there,” he says.

https://www.collectivesun.com/

 />/>

Source: Forbes Business

 
Update
2

2 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (N ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH37 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Green offices make workers happy - and productive
London, Sep 1 (IANS) Want to be happy and productive at work? Keep a plant next to your computer.
 
 
Special team in PMO will fast-track Japanese investment: Modi (Roundup)
Tokyo, Sep 1 (IANS) Assuring the same quick reaction and proactive response a Japanese investor accorded when he was chief minister of Gujarat, Prime Minister Narendra Modi Monday announced a special team in his office to fast-track investments from Japan.
 
 
NASA's Mars rover set for memory reformat
New York, Sep 1 (IANS) NASA's Mars exploration rover Opportunity is set for a flash memory reformatting after experiencing an increasing number of computer resets.
 
 
Novel way to trace Sun's long-lost siblings
Washington, Sep 1 (IANS) We know that stars that are part of the same cluster are chemically identical. A study now reveals that stars which were born together and then dispersed immediately rather than forming a cluster also share similar traits.
 
 
 

Latest from the Network

Peng Shuai reaches US Open quarters for first time
New York, Sep 1 (IANS) World No.39 Peng Shuai of China defeated Lucie Safarova of the Czech Republic 6-3, 6-4 to reach the US Open quarter-finals, marking her first women's singles final eight appearance in a Grand...
Read more on Sport Balla
 
Green offices make workers happy - and productive
London, Sep 1 (IANS) Want to be happy and productive at work? Keep a plant next to your computer. "Green" offices with plants make staff happier and more productive than "lean" designs stripped of greenery, new...
Read more on Celebrity Balla
 
Special team in PMO will fast-track Japanese investment: Modi (Roundup)
Tokyo, Sep 1 (IANS) Assuring the same quick reaction and proactive response a Japanese investor accorded when he was chief minister of Gujarat, Prime Minister Narendra Modi Monday announced a special team in his office...
Read more on Politics Balla
 
Thompson, Stewart sweep 100 metres at Berlin meet
Berlin, Sep 1 (IANS/CMC) Trinidadian Richard Thompson won the men's 100 metres at the ISTAF athletics meet here as the Caribbean swept both sprints. Thompson, a double silver medallist at the Beijing Olympics six...
Read more on Sport Balla
 
Roger Moore loves being known as James Bond
Sir Roger Moore says there is ''no downside'' to being known as James Bond. The 86-year-old actor played the fictional British spy seven times between 1973 and 1985 in movies like 'The Man With the Golden Gun' and 'For...
Read more on Movie Balla
 
Charlie Hunnam for Escape From New York remake?
Charlie Hunnam could be set to star in an 'Escape From New York' remake. The 'Sons of Anarchy' actor - who dropped out of the upcoming 'Fifty Shades of Grey' film due to scheduling issues - is rumoured to be in talks...
Read more on Movie Balla
 
Kelly Brook suffered second miscarriage
Kelly Brook suffered a second miscarriage while dating Thom Evans. The 34-year-old actress and the former rugby star lost their first child on May 6 2011 when Kelly gave birth at just six months pregnant and she's now...
Read more on Celebrity Balla
 
Joan Rivers laughed about 'little procedure'
Joan Rivers laughed about going to hospital for ''a little procedure'' the night before the operation that left her on life support. The 81-year-old comedienne went into cardiac arrest while having surgery on her vocal...
Read more on Celebrity Balla
 
Ray Allen Being Pursued by San Antonio Spurs and Los Angeles Clippers
The San Antonio Spurs and Los Angeles Clippers are interested in veteran shooting guard Ray Allen.The Spurs and Clippers are the teams which are expected to compete with the Cleveland Cavaliers for Allen's services. In...
Read more on Sport Balla
 
Bruce Springsteen has written children's book
Bruce Springsteen has penned a children's book based on his music. The rock icon will write the text for 'Outlaw Pete', which shares its name with the opening ballad on his 2009 album 'Working on a Dream', and he has...
Read more on Celebrity Balla