Why We Launched CleanCapital

A few years ago, I refinanced my law school loans with SoFi. I was ushered through a painless process that resulted in better loan terms and a lower rate. As a lawyer that was involved in billions of dollars of clean energy transactions, I was accustomed to inefficient, painful financings. My SoFi experience offered an alternative approach. If there was an easier way to finance student loans, surely, I thought, there could be a better way to finance clean energy projects.

If there was an easier way to finance student loans, surely, I thought, there could be a better way to finance clean energy projects

The idea was born, and the founding team began work on the business that would become CleanCapital.

Frustrated by the status quo, we set out to change the paradigm that was restraining clean energy growth. This is why we created CleanCapital — a technology-driven platform that is accelerating clean energy with simpler finance.

Getting Started

CleanCapital recently achieved an important milestone towards this goal. We announced a first-of-its-kind clean energy financing that allowed a diverse group of investors to directly invest into a portfolio of operating solar projects. CleanCapital received funding from a prominent insurance company alongside a number of family offices and individuals.

It may sound basic, but until now, very few investors could access direct solar investments. Clean energy investing has been limited to a small handful of banks and investment funds with little participation from pension funds, family offices and individuals despite the appeal of these long-term cash-flowing assets. Yet it is broad investment from these very investors that is critical to achieving ambitious and necessary clean energy goals.

Accelerating a Global Transition to Clean Energy

The global awakening to the impact of a carbon-saturated future is leading investors and policymakers to take material steps to transition to a clean energy economy. An increasing trend towards divesting from carbon has led many large investors to seek clean energy alternatives and they are doing so with broad policy support.

In December 2015, COP21 convened in Paris to negotiate the Paris Agreement in which nearly 200 nations agreed to implement measures to limit global warming. In the United States, the Clean Power Plan and numerous state policies — most recently, California and New York — have similarly demanded robust clean energy reforms.

PV Deployment Forecast (MWdc) per Year
Source: US Solar Market Insight Report for Q1 2015 – GTM Research

A Better Way to Invest

Expanding clean energy investment requires CleanCapital to offer a different business model. Investors repeatedly express frustration with the dominant “fund” investment approach in which investors blindly lock up capital for long periods at high fees. CleanCapital allows investors to review and make investments online at their convenience. With low fees and a transparent investing experience, CleanCapital puts investors first.

A Better Investment

Clean energy is an excellent investment class that provides sound, predictable returns to investors. It can be a dependable piece of a diverse portfolio particularly in today’s environment. With corporate bonds yielding in the low single digits, CleanCapital deals offer investors a similar risk profile with stronger returns. In a “high risk/low return world,” solar investing offers investors an attractive new investment alternative. It is a real asset with real returns.

What’s Next?

The wheels of the clean energy transformation have been riddled with friction. In the United States alone, building and financing clean energy projects is painfully challenging. While CleanCapital’s first step is simplifying and broadening investment in the space, we are developing cutting edge technology that will unhinge barriers to growing it.

The CleanCapital team came together because of these challenges, not in spite of them. With two Iraq war veterans among the co-founders, the CleanCapital mission is an extension of their military service and post-military service. The team has also built cutting edge software, worked in the White House, and led over $1 billion of clean energy financings. We came together to grow CleanCapital into a ground-breaking investment platform that solves problems and transforms the energy sector.

CleanCapital Announces John Hancock To Lead Financing Of Distributed Generation Solar Portfolio

CleanCapital announced today a first-of-its-kind clean energy financing opportunity. The company closed its first offering in which individual private investors are able to invest directly into a diversified portfolio of solar projects. CleanCapital received funding from John Hancock Life Insurance Company, which invested senior debt into the $21 million portfolio of 15 solar projects in 7 states.

“This is an exciting time for CleanCapital and a turning point for clean energy investing, as we demonstrate to the market a more efficient process for solar developers to quickly exit their existing distributed generation portfolios,” said Jon Powers, Co-Founder of CleanCapital. “We are pleased to have John Hancock’s support because of their long history of financing in the renewable energy space.”

Historically, clean energy finance has been limited to institutional investors, large banks, private equity firms, and tax equity investors. CleanCapital changes that, and allows more people to have access to these lucrative investments. The CleanCapital strategy is about long term investing and maximizing existing cash flowing assets.

CleanCapital’s investment platform identifies, screens and manages clean energy projects for investors. The team manages the entire process—from sourcing projects to underwriting and evaluating each project. Once the project is onboarded, CleanCapital actively monitors the investment in real-time and distributes proceeds to investors. By eliminating typical transaction barriers and making capital more accessible, we’re accelerating clean energy growth worldwide.

“Solar project investing offers the opportunity to invest in clean and renewable sources of energy with predictable cash flows each year. CleanCapital provides high quality investment opportunities with long term power contracts,” said Scott Kushner, Director, Power & Infrastructure at John Hancock.

The portfolio is a mixture of ground-mounted and roof-top solar systems that provide electricity to school districts, universities, and large enterprises. The CleanCapital-John Hancock financing enables large institutional investors to make high impact and high yield investments in clean energy channels.

“The solar projects are a win-win for our school district, not only are we making a positive contribution to the community by transitioning to renewable energy, the schools are receiving free solar power and using technical performance data from these systems to enhance classroom learning,” said Richard Steinbrugge, the Executive Administrator for Facilities, Beaverton School District. “The CleanCapital team made the acquisition of the investor-financed solar projects located on three schools in our district frictionless. I am looking forward to working closely with them in the future.”

This is the first in a series of offerings CleanCapital will roll out this year, as the company already has over $100 million in operating distributed generation solar projects in the pipeline for future investments. Learn more about investing in clean energy here.