By Jesse Morris
From Forbes to Fortune, Bloomberg to the Wall Street Journal, a young company named Mosaic has been getting a lot of attention of late. Why? Because Mosaic is bringing crowd-sourced funding to the world of solar photovoltaic (PV).
Crowdfunding is nothing new. Companies such as Kickstarter have allowed individuals to fund everything from their next indie film to extensive out of pocket medical bills with pooled donations from family, friends and other supporters. But thanks to last year’s JOBS Act, debt-based crowdfunding is now an option as well, in which investors come together to fund startups and small businesses in return for repayment plus interest from a company like Mosaic.
It’s inclusive, meaning that investors of all shapes and sizes can get into the game. And it currently makes for a good, low-risk investment. Mosaic—with more than $1.1 million invested in solar projects to date—boasts 4.5–6.5 percent risk-adjusted annual returns, besting the latest interest rates on 30-year Treasury bonds.
But much of the crowdfunding solar coverage under-emphasizes a key point: funds raised from the crowd—in addition to providing attractive returns for investors and enabling more solar installation period—also have the potential to lower the cost of electricity from solar PV systems in the here and now.
Solar finance: credit card vs. mortgage rates
Imagine for a moment that a credit card company issues a card with a $200,000 limit. Next, lets imagine a homeowner taking that card and buying a new home for $200,000 with a thirty-year term, just like most home mortgages. This lucky homeowner just bought a new home for $0 down!
There’s a problem, though. Financing a home purchase with this hypothetical credit card is a seriously bad deal for the homeowner since the annual interest rate would be 13–15 percent, according to Bankrate.com, which translates into extremely high monthly payments. Instead, most homeowners finance homes on thirty-year terms with more reasonable interest rates in the 3–5 percent range. Such inexpensive single-digit bank debt is a key to making the financing work, since the cost of the debt is a huge factor in the overall cost of the purchase over the term of the deal.
Just as financing solutions like credit cards and home mortgages help families buy new appliances and homes, several different finance solutions are helping solar energy systems be deployed on homes and businesses throughout the U.S. today. In fact, about 75 percent of residential solar photovoltaic projects and 40 percent of commercial ones are financed with different “third-party ownership” models where electricity users install a solar system with little to no money down and start saving money from day one.
But the capital used to deploy these third-party-owned solar projects has an effective interest rate that looks more like that of a credit card than a mortgage. This translates into high monthly payments for electricity from solar systems—just like a homeowner making steep payments on a credit card in the home purchase example. Although it’s not the only factor at play, high interest rates (closely related to “costs of capital”) are one of the big reasons we only see lots of solar in places like Hawaii (where residents pay the highest electricity rates in the nation), but not Kentucky: Solar developers can only produce savings for customers in areas with a combination of high electricity rates, good sunlight, and attractive local incentives—think California and Arizona, two leading states nationwide for total installed solar capacity.
For folks interested in deploying as much solar in the U.S. as quickly as possible, this is a problem. Right now, the capital structure behind most solar projects in the U.S. is prohibitively expensive for the economics of solar to pencil out in most of the country. So, we’ve got to help make capital for solar projects look more like home mortgage loans than credit card debt.
There are a number of ways to do this, but many of the most popular solutions, such as master limited partnerships and solar-specific real estate investment trusts, require regulatory and/or federal legislative changes and aren’t likely to become large-scale solutions in the near term. However, there’s one solution that’s already upon us—crowdfunding.
Crowdfunding lowers costs
As shown above, the “credit card-like” capital that’s currently used for solar projects is composed of expensive equity from two sources: tax equity investors (companies able to absorb the tax benefits associated with solar projects) and solar developers. This equity is expensive and, in simple terms, has an effective interest rate of more than 15 percent. This translates into high a high cost of electricity from solar systems.
But this is where groups such as Mosaic step in. Expensive tax equity is still used to pay for about half of a project, but instead of using equity from the solar developer, crowdfunding providers can step in with funds from the crowd. Capital raised from the crowd has a much lower interest rate (~6.5 percent) than equity put in from a solar developer (~15 percent), so the combined interest rate for the solar project goes down, along with the cost of electricity from the solar system.
Finally, at some point in the future we could imagine crowdfunding companies providing all of the capital for a solar project. This would mean a very low interest rate on the entire project and a very low cost of electricity from the solar system.
There are a number of different solutions in development that will help lower interest rates associated with solar PV financing. But crowdfunding excites me for one main reason: it’s here now. And if we’re to get on pace to realize Rocky Mountain Institute’s vision of a secure, low-carbon, and affordable U.S. electricity system by 2050 as outlined in Reinventing Fire, we need solutions that drive deployment of existing technology as soon as possible.
This blog post originally appeared on Greenbiz.
Visit EcoWatch’s RENEWABLES page for more related news on this topic.
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By Alexandra Rowles
Oregano is a fragrant herb that's best known as an ingredient in Italian food.
However, it can also be concentrated into an essential oil that's loaded with antioxidants and powerful compounds that have proven health benefits.
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By Emily Grubert
Natural gas is a versatile fossil fuel that accounts for about a third of U.S. energy use. Although it produces fewer greenhouse gas emissions and other pollutants than coal or oil, natural gas is a major contributor to climate change, an urgent global problem. Reducing emissions from the natural gas system is especially challenging because natural gas is used roughly equally for electricity, heating, and industrial applications.
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What RNG Is and Why it Matters<p>Most equipment that uses energy can only use a single kind of fuel, but the fuel might come from different resources. For example, you can't charge your computer with gasoline, but it can run on electricity generated from coal, natural gas or solar power.</p><p>Natural gas is almost pure methane, <a href="https://www.eia.gov/energyexplained/natural-gas/" target="_blank">currently sourced</a> from raw, fossil natural gas produced from <a href="https://www.eia.gov/energyexplained/natural-gas/where-our-natural-gas-comes-from.php" target="_blank">deposits deep underground</a>. But methane could come from renewable resources, too.</p><p><span></span>Two main methane sources could be used to make RNG. First is <a href="https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks" target="_blank">biogenic methane</a>, produced by bacteria that digest organic materials in manure, landfills and wastewater. Wastewater treatment plants, landfills and dairy farms have captured and used biogenic methane as an energy resource for <a href="http://emilygrubert.org/wp-content/uploads/2019/02/eia_860_2017_map.html" target="_blank">decades</a>, in a form usually called <a href="https://www.eia.gov/energyexplained/biomass/landfill-gas-and-biogas.php" target="_blank">biogas</a>.</p><p>Some biogenic methane is generated naturally when organic materials break down without oxygen. Burning it for energy can be beneficial for the climate if doing so prevents methane from escaping to the atmosphere.</p>
Renewable Isn’t Always Sustainable<p>If RNG could be a renewable replacement for fossil natural gas, why not move ahead? Consumers have shown that they are <a href="https://www.nrel.gov/analysis/green-power.html" target="_blank">willing to buy renewable electricity</a>, so we might expect similar enthusiasm for RNG.</p><p>The key issue is that methane isn't just a fuel – it's also a <a href="https://www.eia.gov/environment/emissions/ghg_report/ghg_overview.php" target="_blank">potent greenhouse gas</a> that contributes to climate change. Any methane that is manufactured intentionally, whether from biogenic or other sources, will contribute to climate change if it enters the atmosphere.</p><p>And <a href="http://doi.org/10.1126/science.aar7204" target="_blank">releases</a> <a href="https://doi.org/10.1016/j.wasman.2019.07.029" target="_blank">will happen</a>, from newly built production systems and <a href="https://theconversation.com/why-methane-emissions-matter-to-climate-change-5-questions-answered-122684" target="_blank">existing, leaky transportation and user infrastructure</a>. For example, the moment you smell gas before the pilot light on a stove lights the ring? That's methane leakage, and it contributes to climate change.</p><p>To be clear, RNG is almost certainly better for the climate than fossil natural gas because byproducts of burning RNG won't contribute to climate change. But doing somewhat better than existing systems is no longer enough to respond to the <a href="https://doi.org/10.1038/nclimate2923" target="_blank">urgency</a> of climate change. The world's <a href="https://www.ipcc.ch/sr15/chapter/spm/" target="_blank">primary international body on climate change</a> suggests we need to decarbonize by 2030 to mitigate the worst effects of climate change.</p>
Scant Climate Benefits<p><a href="https://iopscience.iop.org/article/10.1088/1748-9326/ab9335/meta" target="_blank">My recent research</a> suggests that for a system large enough to displace a lot of fossil natural gas, RNG is probably not as good for the climate as <a href="https://investor.southerncompany.com/information-for-investors/latest-news/latest-news-releases/press-release-details/2020/Southern-Company-Gas-grows-leadership-team-to-focus-on-climate-action-innovation-and-renewable-natural-gas-strategy/default.aspx" target="_blank">is publicly claimed</a>. Although RNG has lower climate impact than its fossil counterpart, likely high demand and methane leakage mean that it probably will contribute to climate change. In contrast, renewable sources such as wind and solar energy do not <a href="https://www.eia.gov/environment/emissions/carbon/" target="_blank">emit climate pollution directly</a>.</p><p>What's more, creating a large RNG system would require building mostly new production infrastructure, since RNG comes from different sources than fossil natural gas. Such investments are both long-term commitments and opportunity costs. They would devote money, political will and infrastructure investments to RNG instead of alternatives that could achieve a zero greenhouse gas emission goal.</p><p>When climate change first <a href="https://www.nytimes.com/1988/06/24/us/global-warming-has-begun-expert-tells-senate.html" target="_blank">broke into the political conversation</a> in the late 1980s, investing in long-lived systems with low but non-zero greenhouse gas emissions was still compatible with aggressive climate goals. Now, zero greenhouse gas emissions is the target, and my research suggests that large deployments of RNG likely won't meet that goal.</p>
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By Charli Shield
When an elephant dies in the wild, it's not uncommon to later find its bones scattered throughout the surrounding landscape.
Elephant Burial Grounds<p>Highly social creatures that form deep familial bonds, elephants have long been observed gathering at the site where a peer or family member has died — often spending hours, even days, quietly investigating the bodies or the bones of other dead elephants.</p><p>Although the popular idea that dying elephants are instinctively drawn to special communal graves — so-called "elephant graveyards" — is a myth, their tendency to go out of their way to visit the bones and tusks of the deceased isn't unlike human rituals at graveyards, says animal psychologist Karen McComb.</p><p>"They spend a lot of time touching and smelling skulls and ivory, placing the soles of their feet gently on top of them, and also lifting them up with their trunks," McComb, who's been studying African elephants for 25 years in Kenya's Amboseli National Park, told DW.</p><p>The most striking part of watching an elephant experience loss, Poole recalls, is the quietude. She still remembers one of the first elephant deaths she witnessed; a mother who birthed a stillborn calf. That elephant stayed with its baby for two days, trying to lift it and defending it from vultures and hyenas.</p><p>"I was so struck by the expression on her face and her body. She looked so dejected. It was really like, 'Oh God, these animals grieve…'. It was just so different," Poole told DW. </p>
Witnessing Emotions in Animals<p>Not all scientists are comfortable concluding that elephants grieve. Among the more than 30 reports of elephant reactions to death that Wittemyer co-reviewed in <a href="https://link.springer.com/article/10.1007/s10329-019-00766-5" target="_blank">a study published in November 2019</a> were accounts of "enormous variation and nuance" he says. "It can be incredibly involved and intricate for extended periods or can be relatively cursory checks."</p><p>In Wittemyer's own experience, it can be difficult not to attribute some kind of emotional experience to the more involved interactions between elephants and their dead.</p><p>He shares the story of an "extraordinary event" involving the death of a 55 year-old matriarch in Kenya in a protected area that happened to be near his place of work. She was visited by multiple unrelated families while she was dying, including another matriarch that exerted such enormous effort attempting to lift her to her feet that she broke her tusk, which Wittemyer says, is "like breaking a tooth." </p><p><span></span>"It was a remarkable example of this heightened emotional state, it was very clearly a very stressful interaction," he says.</p>
A Different Sensory World<p>One factor that limits our ability to fully grasp the way elephants process and respond to loss is our markedly different sensory experiences of the world.</p><p>An elephant's world is fundamentally olfactory — based on smell. Ours is visual. Previous <a href="https://pubmed.ncbi.nlm.nih.gov/25053675/" target="_blank">research</a> has shown elephants possess the most scent receptors of any mammal, and can <a href="https://pubmed.ncbi.nlm.nih.gov/17949977/" target="_blank">use smell</a> to discern the difference between different human tribes from the same local area.</p><p>That could explain why elephants exhibit such interest in sniffing the bones and tusks of others, as a <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1617198/" target="_blank">2005 study</a> from McCombs highlighted. When presented with the skulls and ivory of long-dead elephants and those from other large herbivores, including rhino and buffalo, McCombs and her team found elephants approached and were specifically attracted to the remains of their own species. </p><p>Without access to the smells an elephant picks up on, Wittemyer says "an enormous amount of stuff" could be missed by humans when studying these behaviors.</p>
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