The next time you're on the lookout for a side gig, you could consider selling solar power to your neighbors.
"We want to make it easier to set up a community solar project than to open a McDonald's franchise," Franz Hochstasser, co-founder and CEO of Raise Green said as a way to explain his startup's mission.
Such is the lofty goal of Franz Hochstrasser and Matthew Moroney, the co-founders of Raise Green, a Greentown Labs startup, which is a crowdfunding platform for community-level climate change projects. Raise Green bills itself as a marketplace that brings together creators of climate change projects and impact investors who want to back these projects.
But the startup goes a step further in making the change possible, by helping the creators with creating, developing, securing finance and running the project.
Both graduates of Yale University, Hochstrasser and Moroney met while studying sustainable finance and climate change solutions. The duo was frustrated by the lack of options for citizens to act on climate change.
As it goes, they brought the change they wished to see.
"There had to be more real options to take action on climate change beyond just writing to your local Congressmen," Hochstrasser said.
As a proof-of-concept, the pair founded New Haven Community Solar, which provides electricity at discounted rates to an affordable housing project that serves citizens at risk of homelessness. The project raised close to $100,000 from 130+ crowd-investors that financed two solar arrays for the community.
And to encourage people to follow their lead, Hochstrasser and Moroney are offering up the project’s legal documents as templates, including small-scale tax equity, as free to anyone who wants to replicate the model to raise capital through Raise Green to deploy a project in their community.
The startup is also working with IBM Redhat to build an originator engine that will walk people through the building and running a project.
"We want to extend the ridesharing model to green tech projects," Hochstasser said. "We want to be the first sustainable side hustle."
The startup is in the process of facilitating approximately 40 projects across the country. Most projects are community solar projects in the 50 kW to 500 kW range.
This is how it works: The holding company running the community project would set up a contract called a power purchase agreement. Typically, these are 20-year contracts where the company agrees to sell the electricity to its community at discounted rates. The proceeds are in turn disbursed to investors of the project.
"We are doing with solar projects what Amazon did with books in the 90s," said Hochstrasser. "The attitude we are taking with solar is, 'If you can do a project finance company with solar power, we can grow from there and do more.'"
Hochstrasser envisions Raise Green facilitating projects in affordable housing, electric car charging stations, and community-supported agriculture, to name a few.
On the investment side, he believes this kind of community crowdfunding initiative is a step away from the extracted capitalist model where developers, banks and financiers are the beneficiaries.
The startup also works with the MIT Media Lab's City Sciences Group on fractional assets, inclusive ownership and new financial models.
"With Raise Green, we are extending a new option to the market and promoting inclusive capitalism which allows the community to run, build and own a project," Hochstrasser said.
Under this model, investors have the option of either investing debt or equity in projects of their choice. While the minimum investment could vary based on the undertaking, the average investment size is roughly $1,000.
For instance, in one New Haven-based project, investors could buy 100 shares for $300.
Raise Green wants to use sophisticated financial tools to bolster impact investing at a local level. "There is an egalitarian nature to crowd investing. Big-ticket investors could come with big money but they will get the same security as teachers or students," Hochstrasser said.
The company has a full-time staff of three, with a couple of part-time employees and advisors, and is currently on the lookout for a lead engineer, a community growth manager and a project finance associate.
