How to invest in your first solar project
On Wednesday July 8th, we hosted an Impact Investor Webinar that explained our investor marketplace in detail. Feel free to check out our list of available investment opportunities here! We talked about why investing with Raise Green matters and how prospective investors can get started today.
The investor process can be simplified into five crucial steps:
- Create an account
- Pick a project
- Review an investment opportunity
- Invest and back a project
- Watch your impact grow
If you missed out, feel free to check out the recording of the webinar here. We also received some great questions from prospective investors that we would like to share with you all! We picked six of our favorites and provided detailed answers below.
If you have any questions unanswered in the video or our answers below, please reach out to us at email@example.com. We believe that investing in the right thing should be easy, and we aim to make sustainable impact investing as affordable and accessible as possible, so please provide feedback to help us accomplish this goal.
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6 Questions from prospective Investors:
What is the lifetime of a solar project, and how will the returns from a project be delivered to an investor?
Solar projects can generate electricity for 15-40 years or more. We typically define the lifetime of a solar project as the lifetime of a contract to purchase electricity, referred to as a power purchase agreement (PPAs). PPA’s normally last somewhere between 15-30 years. However, the solar asset itself (the panels and inverters) may be generating electricity longer than that.
Regarding returns, we look for projects that are projected to deliver at least 5% return or more to investors. The length of the returns vary by investment opportunity, as each has different return profiles. All of these types of details will be described in depth for each security on the investment details page for you to review before deciding to invest!
We recommend you be as educated as possible on the risks of investing, as each project is unique in their opportunity for return.
How does the contracted cash flow from a project get divided between investors, Raise Green, and the Project Creator team? Are they fixed by the platform or set up on a per project basis?
We strive to be fully transparent about fees and costs associated with creating a project, or investing in one. Raise Green is also an investor and equity holder in every equity project on our platform, so we are also motivated to see each project succeed!
Each project’s cash flow may vary in accordance with the project or company type. Typically the owner of the project (Creator) retains 10-15% equity in the project and the investor community would own the remaining equity of the project. Additionally, if a project raises money successfully, Raise Green collects a platform listing fee (5% of the raise).
What states do you plan to have projects in, and are there any restrictions on investor’s locations to invest in projects?
Raise Green is a FINRA Member and is licensed with the SEC to sell and issue securities nationwide, which allows us to host projects and help raise capital for any U.S. company. Investors nationwide are welcome to invest in any project. We are excited to provide access to capital to anyone who is interested in leading a project and is looking for national attention and funding. Check out our Originator Program for more information!
What are the options for an investor wanting to exit a project? Particularly in the case of an equity funded project? (how do investors sell their shares)
Similar to venture investing, there is currently no secondary market for selling the shares you purchase. When you buy equity in a project you are committing to being an investor for the project’s lifetime. While there is not currently a secondary market set up, it is possible to resell your shares if you can find a willing buyer, and in most cases investors will be able to sell shares openly within one year, or transfer shares to family members or other financial organizations.
Can we use a self-directed IRA account to invest in these investment opportunities?
Yes, but it is easier for some self-directed IRA accounts as compared to others. Please reach out to us at firstname.lastname@example.org and we would be happy to look at your individual circumstances to see if it is a possibility.
If a project is funded, is your initial investment the limit for the project, or can there be a further pro-rata call for capital, if the project creator under-estimated the project cost?
When we structure the investment opportunity with the project creator we do our best to include all the industry standard costs that you would expect, in addition to an amount of buffers for unexpected costs. An additional pro-rata capital call would depend on the particular investment, but is not typical. A more likely situation would be a successful creator funding their 2nd or 3rd project at a later point in time, in which past investors would have another investment opportunity!
Raise Green prides ourselves on our due diligence, as we use the same infrastructure and financial models used at large investment banks. You can read more about the criteria we use to assess project opportunities and costs, as well as read more about each of these important educational topics in our FAQ.