Ron Pernick, the co-founder and principal of Clean Edge, a research and advisory firm for the clean energy sector, wrote a piece for Renewable Energy World, titled Crowdsourcing, Limited Partnerships and Other Tools for Financing our Clean- Energy Future. The piece analyzes two promising avenues for financing clean technology in the 21st century; one a traditional financing mechanism, the other a brand new- but potentially game changing tool.
The first, a Master Limited Partnership (MLP), relies on traditional capital models that have been historically employed for fossil fuel energy production. The MLPs trade like corporate stock, and allow investors to earn dividends. In terms of MLPs, however, current legislation is antiquated and is only applicable to oil and gas. However, as Pernick points out, there is reason for optimism in the clean tech world, as legislators start to acknowledge the gap, and attempt to address it. For instance, Senator Chris Coons (D- Delaware) has introduced the Master Limited Partnerships Parity Act, which would let MLPs include renewable energy.
The second, crowdfunding, allows thousands of investors to provide small investments that add up to millions. The crowdfunding (or crowdsourcing, or peerfunding) model democratizes the financing process of solar installations. An example is Solar Mosaic, which is the first of its kind, but uses the KickStarter model to finance solar. Solar Mosaic provides an online platform that could raise millions of dollars from thousands of investors with the potential of a decent return.
Read more about these two options in financing clean energy in Pernick's article.
The first, a Master Limited Partnership (MLP), relies on traditional capital models that have been historically employed for fossil fuel energy production. The MLPs trade like corporate stock, and allow investors to earn dividends. In terms of MLPs, however, current legislation is antiquated and is only applicable to oil and gas. However, as Pernick points out, there is reason for optimism in the clean tech world, as legislators start to acknowledge the gap, and attempt to address it. For instance, Senator Chris Coons (D- Delaware) has introduced the Master Limited Partnerships Parity Act, which would let MLPs include renewable energy.
The second, crowdfunding, allows thousands of investors to provide small investments that add up to millions. The crowdfunding (or crowdsourcing, or peerfunding) model democratizes the financing process of solar installations. An example is Solar Mosaic, which is the first of its kind, but uses the KickStarter model to finance solar. Solar Mosaic provides an online platform that could raise millions of dollars from thousands of investors with the potential of a decent return.
Read more about these two options in financing clean energy in Pernick's article.
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