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.
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.
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.