The Long Road to Solar Tax Credits: Making Tax Equity Accessible

Amongst recent statistics supporting clean energy investment, [nearly half of U.S. homeowners](https://www.pewresearch.org/fact-tank/2019/12/17/more-u-s-homeowners-say-they-are-considering-home-solar-panels/) are interested in installing solar panels on their property. It’s a promising sentiment, since installing solar panels on just 25% of US homes could save the U.S. [$88 billion under current conditions](https://electrek.co/2020/12/03/the-us-would-save-billions-if-local-solar-powered-just-25-of-homes/), and [$473 billion by 2050 under a 95% clean electricity target](https://www.latimes.com/environment/newsletter/2021-01-07/how-rooftop-solar-could-save-americans-473-billion-dollars-boiling-point):

“Expanding local solar and storage on the distribution system reduces the need for power plants that only run on peak power days. It also better manages demand by offering more local energy products that customers want, which can increase grid resilience and reduce overall costs on the distribution and transmission grid.” - Michelle Lewis on [Local Solar Roadmap](https://www.localsolarforall.org/roadmap)

If solar power is appealing to a large portion of homeowners, with a calculated benefit to the grid as a whole, why aren’t there more solar panels on houses? In the same Pew survey that found 46% of U.S. homeowners are open to installing them, only another 6% have actually done so. 

A major obstacle is the cost of permitting and inspection, also known as “soft costs.” In fact, soft costs currently comprise at least [⅓ of the total price for an average household solar installation](https://pv-magazine-usa.com/2021/01/01/a-no-brainer-for-u-s-job-creation-update-solar-permitting-and-inspections/). While the costs of hardware and installation have decreased dramatically over the last 10 years, the soft costs have effectively remained the same.

The blame isn’t so much on the existence of permitting and inspection, they surely have important roles, but rather on the rigidity and complexity of the U.S. regulatory landscape. In fact, there are over [36,000 Authorities Having Jurisdiction (AHJs)](https://solarbuildermag.com/featured/searching-ahjs-for-solar-permitting-start-with-this-free-crowd-sourced-registry/) across the 50 states, and permitting currently averages 30-40 days.

“Locating the authority that has jurisdiction to approve a rooftop solar project is only the beginning. What are the building codes, electrical codes and fire codes that can change project design from one town or city to the next?” - Matthew Hirsch, Solar Builder Mag.

The most effective remedy would be structural reform on a national level, which may be on the horizon with a Biden presidency. Standardizing and simplifying permitting for commercial solar is the logical next step in keeping up with its increasing popularity, a non-partisan movement towards efficiency. 

In line with that, Raise Green is engaged in streamlining the solar permitting process by partnering with Blu Banyan and the Orange Button Initiative on a project to [harness a crowd-sourced registry of all solar AHJs](https://github.com/SunSpecOrangeButton/ahj-registry). Coupled with our [Originator Engine](/originator-program), the AHJ database aids in contract automation and permitting, reducing the need for tedious research on local solar regulations. 

It’s an exciting time to be developing local solar projects! With reduced costs and anticipated federal support, we may soon witness a paradigm shift in how our energy is generated and stored. 

If you’re interested in starting your own clean energy project, Raise Green can help with both the development ([Originator Engine](https://oe.raisegreen.com/)) and funding ([Marketplace](/investment-opportunities-preview)). Or if you’re interested in investing in an existing project, you can create an investor account for free [here](https://marketplace.raisegreen.com/home/register). 

As always, feel free to send any questions or comments you might have to [info@raisegreen.com](mailto:info@raisegreen.com).

To get the most up-to-date information on Raise Green content, please sign up for our email list and follow any of our social accounts ([Instagram](https://www.instagram.com/raisegreeninc/), [Twitter](https://twitter.com/RaiseGreenInc), [Facebook](https://www.facebook.com/RaiseGreenInc/), [LinkedIn](https://www.linkedin.com/company/raisegreen/)). 


*This Blog is for discussion purposes only, expresses the views of Raise Green, and is not investment research. This is not investment advice, and does not constitute a solicitation to sell or an offer to buy any securities. Certain information is from or links are to third party sources. Although they are believed to be reliable, we do not guarantee their accuracy, completeness or fairness. Raise Green is a licensed Funding Portal with the SEC and FINRA, and is not a Municipal Advisor. Prior to being approved to list a company on the Raise Green portal, a diligence review is completed. Prior to investing. investors must sign up for an account on the portal. Raise Green does not provide tax, accounting or legal advice. Investing in crowdfunded offerings involves risk and you should review the risks of a particular investment prior to investing. You are strongly encouraged to consult your professional advisors before investing. Go to [www.raisegreen.com](/homepage) for additional information on services, the funding portal, regulation, and investment risks. Or, direct inquiries to info@raisegreen.com. Copyright © 2021
*

Simplifying Permitting and Cutting Soft Costs for Local Solar Projects

The future is looking bright for equitable and inclusive financing with the SEC’s favorable new crowdfunding regulations. Back in early September, we wrote a blog titled “[Changing Rules in a Changing Climate](/blog/changing-the-rules),” highlighting our comment letter to the SEC on a proposal seeking to improve access to capital and “Harmonize and Improve the ‘Patchwork’ Exempt Offering Framework” of existing private securities offerings, while maintaining investor protection. In other words, we want to make it easier for anyone to raise capital and invest in impactful community-scale projects and local companies. To us at Raise Green, crowdinvesting represents an opportunity for the 95% of Americans who aren’t rich (the SEC calls them “non-accredited investors”) to have more of the same types of investment opportunities as the wealthy (“accredited investors”). It also means giving climate and clean energy entrepreneurs (we call them “Originators”), especially historically disadvantaged founders and local project developers, a way to raise money that never existed before.

In our prior blog about the rulemaking process, we highlighted three of our favorite proposed changes to Regulation Crowdfunding along with the benefits these changes would bring to investors, Originators, and the planet. Now, we are excited to share an update on the new [Final Rule](https://www.sec.gov/news/press-release/2020-273) released by the SEC on November 2nd which includes our three ‘favorite’ proposed changes, as well as 35 mentions of Raise Green from our [comment letter](https://www.sec.gov/comments/s7-05-20/s70520-7261538-217666.pdf) on the rulemaking. The final rule includes nearly all of our recommendations within it! This is an excellent outcome, as it increases the ease with which impact investors and Originators can interact and exchange capital on our marketplace towards our grand mission: fostering impactful and equitable climate projects and empowering communities across the US to create, own and benefit from climate solutions.

![Img](https://a.storyblok.com/f/77953/2411x2483/ceaadc1005/u-s-_securities_and_exchange_commission_headquarters.png)

Below are four of the changes with short explanations of how they will bring about positive change to crowdfunding and the Raise Green community. 

**1. Increased maximum raise limit for companies from $1.07M to $5M per company per year**

This means projects of bigger size and scale, including large community solar projects and even utility scale projects can raise inclusive financing from the crowd. This also enables more access for crowdinvestors who will have more and bigger opportunities to buy into larger projects, which often means increased profitability on bigger deals. In the case of solar projects, this allows projects to take advantage of lower cost estimates with economies of scale and therefore increase their economic efficiency and enhance value creation, all the while increasing the amount of kilowatts deployed per project! 

**2. Removal of accredited investor limits on crowdinvesting**

Part of creating a Raise Green account, or an account on any registered crowdfunding portal, involves estimating your net-worth and determining the maximum amount that both accredited and non-accredited investors can then put towards offerings. With this rule change the limit on the amount that an accredited investor is allowed to invest in a project is removed entirely, meaning once the rule goes into effect, projects will be able to receive larger investments from a variety of institutions and organizations, which increases the feasibility of larger scale projects coming to fruition through inclusive financing. This change may significantly accelerate the use of exempt securities offerings for actually delivering on the popular trend toward ‘blended capital’ that can mix philanthropy, mission-related investment, donor-advised funds, program-related investment, and concessional private capital with traditional private equity and retail impact investors. 

**3: Allowance for crowdfunding Special Purpose Vehicles (SPVs) to be used going forward**

The new rule will now allow for companies to establish an SPV, an entity whose sole purpose is directly acquiring, holding, and disposing of securities issued by a single crowdfunding issuer and raising capital in one or more offerings made in compliance with Regulation Crowdfunding.  This means that now any privately held company can raise capital through crowdfunding without needing to add hundreds or even thousands of individual investors to their capitalization table, thus easing the administration and management challenge of conducting a crowdfunding raise and paying back investors in it. SPVs are subsidiaries created by parent companies to isolate financial risk. By allowing SPVs to act as conduits for investment in private companies, this change should make it more likely and potentially less risky for companies deciding to offer investment opportunities through crowdfunding.

**4: Allowance for prospective issuers to ‘test-the-waters’ to solicit investment interest prior to conducting an offering**

When the rule goes into effect, Originators will be able to communicate with prospective investors prior to listing a raise on Raise Green’s marketplace. Before this rule, there were strict prohibitions against advertising or communicating about a Regulation Crowdfunding offering until the offering actually went live, which meant that Originators were not able to get any feedback on the pricing or level of interest in their project in advance. This change increases the transparency of interactions between Originators and investors, allowing the Originator to open a line of communication and get a sense of how interested the crowd is in funding their project before going through the entire process of preparing an offering, thereby making creating and listing a project for funding more collaborative, transparent and easier than before. 

It’s an exciting time to be involved in crowdfunding, and we can’t wait to see how these changes affect our community. If you’re looking to [invest](https://marketplace.raisegreen.com/offers/offersList), be on the lookout for a wider variety of projects on the way. To be best prepared for upcoming investments, you can [create an investor account](https://marketplace.raisegreen.com/home/register) for free here. In the meantime, check out [our marketplace](https://marketplace.raisegreen.com/offers/PreviewOffers/NzA4MzU=) to see if any projects pique your interest! 

As always, feel free to engage us in conversation and send any questions or comments you might have to [info@raisegreen.com](mailto:info@raisegreen.com).

To get the most up-to-date information on Raise Green content, please sign up for [our email list](https://raisegreen.us18.list-manage.com/subscribe?u=11082e3b065fd4366639c43b6&id=7b4c5a3935) and follow any of our social accounts ([Instagram](https://www.instagram.com/raisegreeninc/), [Twitter](https://twitter.com/RaiseGreenInc), [Facebook](https://www.facebook.com/RaiseGreenInc/), [LinkedIn](https://www.linkedin.com/company/raisegreen/)). 




November 2nd, the SEC released a new rule: “[SEC Harmonizes and Improves “Patchwork” Exempt Offering Framework: Rule amendments harmonize registration exemptions, eliminating complexity and facilitating access to capital and investment while preserving or enhancing important investor protections](https://www.sec.gov/news/press-release/2020-273).”


Outside resources: 

- [https://techcrunch.com/2020/11/16/a-report-card-for-the-secs-new-equity-crowdfunding-rules/](https://techcrunch.com/2020/11/16/a-report-card-for-the-secs-new-equity-crowdfunding-rules/?guccounter=1)
- [https://next.law/big-positive-changes-to-sec-crowdfunding-rules/](https://next.law/big-positive-changes-to-sec-crowdfunding-rules/)
- [https://www.woodshed.agency/blog/how-new-sec-rule-changes-will-affect-equity-crowdfunding](https://www.woodshed.agency/blog/how-new-sec-rule-changes-will-affect-equity-crowdfunding)



*This Blog is for discussion purposes only, expresses the views of Raise Green, and is not investment research. This is not investment advice, and does not constitute a solicitation to sell or an offer to buy any securities. Certain information is from or links are to third party sources. Although they are believed to be reliable, we do not guarantee their accuracy, completeness or fairness. Raise Green is a licensed Funding Portal with the SEC and FINRA, and is not a Municipal Advisor. Prior to being approved to list a company on the Raise Green portal, a diligence review is completed. Prior to investing. investors must sign up for an account on the portal. Raise Green does not provide tax, accounting or legal advice. Investing in crowdfunded offerings involves risk and you should review the risks of a particular investment prior to investing. You are strongly encouraged to consult your professional advisors before investing. Go to www.raisegreen.com for additional information on services, the funding portal, regulation, and investment risks. Or, direct inquiries to [info@raisegreen.com](mailto:info@raisegreen.com). Copyright © 2020*

Favorable New Crowdfunding Regulations in the New Year

The project creation journey continues! By this time you’ve thought about your *motivation* for starting a project, decided on the type of project you are creating, established an idea of the way your team, project company, and holding company interact, and established site control with your project location. 

## Costs
Now you’re ready to quantify the costs and earnings of your project, build out a financial model and bring you towards raising the money. Most projects have myriad costs in addition to the actual cost of the equipment (panels, racking, inverters). These additional costs include legal, permitting, operations and maintenance, etc. They’re often referred to as soft costs, and they make up about 64% of the project cost on average according to PV Magazine.
Part of the value that Raise Green provides as a financing partner is to help you reduce your soft costs. Calculating what your additional costs will be to get your project done is an important step in understanding whether your project will be profitable financially. You will need to itemize these costs in your use of proceeds so that the crowd knows how you’re going to spend their money.
![Img](//a.storyblok.com/f/77953/512x396/cc3adc3ff4/pv-mag-image.png)
## Off-taker
The biggest single driver of the financial viability of your project is the price that you get for selling the electricity that your project generates. That’s why the next step is finding an offtaker for your solar project -- someone who buys the electricity you generate. This could be secured through an agreement from one off-taker, or from many off-takers where community solar is allowed. The standard agreement is called a Power Purchase Agreement (PPA), and it is the bread and butter of solar project finance - a source of revenue that provides contracted cash flows and drives revenue for you and your project’s crowd investors. In your PPA,  off-takers generally agree to a fixed cost of electricity purchase over a long time period of approximately 15-25 years. Raise Green helps simplify this process with the generation of a PPA unique to the variables you enter into our Originator Engine. 

## Financials
As an Originator, earning money for your hard work is crucial. With Raise Green, you can input data unique to your project and we will run a financial model that helps estimate the costs and allows us to conduct due diligence on the financial viability of your project, including your potential Originator earnings. The rest of your forecasted project earnings may be re-payed back to your investors, depending on the way you structure your investment opportunity on our marketplace. It's important to remember that raising money for a project isn’t a get rich quick scheme, you’re building a real infrastructure asset that provides essential services. Monitoring and maintaining your project is a decades-long process as long as the PPA is in effect and your system continues to generate electricity. That’s why it's extra important to have a good team and partners to make a plan for asset management that will see it through for the long haul. 

## Partners
Luckily, you don’t have to do it all yourself, there are enterprise partners standing by to help from start to finish on these services and more: banking, insurance, accounting, legal, tax equity, solar installer/engineering, procurement and construction (EPC). All of these partners play a key role in your project and we’re glad to refer you to some folks so you can establish these relationships prior to the listing and sale of securities on Raise Green’s marketplace. If you have all of these partners so far, or if you know how to establish these partnerships and are up for the task, good for you! Keep on moving forward and get ready for your raise. For some others, you might have only gotten so far and realized that you need extra help, either in the form of a team or capital, or you might just want to unload your project. If this describes you, get in contact with us as we may be able to help in the form of developing your project or listing a development capital raise (more info coming soon!). 

## Marketing
One of the final things to do before listing your project is to come up with the story and start thinking of marketing to your network. By story, we mean the information about your project that will be listed on our marketplace that will be shared with investors. If you’ve made it this far, you’ve passed [our R.A.I.S.E. due diligence](https://www.raisegreen.com/how-investing-works) and put in a lot of time, so feel free to take advantage of it by sharing some of your success story and motivation. This is the place where you mention the beneficial community, environmental, and potential economic benefits that come about from putting your project on the ground. Once it's listed, Raise Green will share it with our network, but it's also on you to contact supporters within your own community network to spread the word and hopefully drive investment interest in your project! 

That concludes the sneak peek into life as a Raise Green Originator. If you have most of the resources and decisions above ready, then you are a perfect candidate to move through our Originator Engine to generate your project. If you find yourself lacking in a couple things here and there, it would be a great idea to reach out to our Head of Originator Sales, Jackie Logan, to [share your project idea in a 15 minute meeting](https://calendly.com/raise-green) and see where Raise Green can provide guidance to fill in the gaps! 

As always, feel free to engage us in conversation and send any questions or comments you might have to info@raisegreen.com.

To get the most up-to-date information on Raise Green content, please sign up for our [email list](http://eepurl.com/dFst3T) and follow any of our social accounts ([Instagram](https://www.instagram.com/raisegreeninc/), [Twitter](https://twitter.com/RaiseGreenInc), [Facebook](https://www.facebook.com/RaiseGreenInc/), [LinkedIn](https://www.linkedin.com/company/raisegreen/)). 


How to Create a Clean Energy Project in Your Community, Part 2: From Finding an Offtaker to Selling Securities

How to create a clean energy project in your community: , part 2: from finding an offtaker to selling securities

Creating your own solar project as a Raise Green Originator is a great way to join the fight against climate change, but it takes hard work and dedication. Put simply, an Originator is a project developer, or a team of concerned and committed citizens that come together to take real action on climate change by developing a clean energy project. This is for anyone who is tired of reading about climate action, and wants to actually take climate action. What follows below is a sneak peek into the steps included in a project’s journey from inception to our Originator Engine and ending with raising money on our investor marketplace to get it done. If you’re reading as a prospective Originator and at any point find yourself missing a piece of the puzzle laid out in either part 1 or 2 of the blog post, it's a good idea to take a few steps back before moving forward. 

It all starts with asking yourself, why do you want to become an Originator? Do you want to set up a sustainable side-hustle, or receive hands-on experience in clean energy to set yourself up for a job elsewhere? Are you interested in creating your own business and growing it over time as a professional solar developer? Do you want to become a leader in your community by enabling investment in local clean energy? Or, are you motivated by helping a local organization, like a school, community center, or non-profit? 

All of the above are legitimate reasons to initiate your Originator journey, but your varying motivations may affect the lifecycle your project takes on, as well as the timeline and role that Raise Green plays in your project. You may also want to think about whether you want to proceed as a solo Originator, as part of a larger organization, or a team of like-minded individuals before you kick off the creation process. Once you think about your motivation for creating a project and get an idea of your Originator team, it’s time to flesh out where your project will be implemented and what it is. 

Most of Raise Green’s market is built around solar projects. Such that, if you’re developing a solar project, or you have an operating solar project that you’re looking to refinance, we have an immense catalogue of resources to help you create and finance your work. If you have a different idea don’t worry, we can still help you access capital to make your idea come to life, but some of the points below may be unrelated to your project. 

One of the first things you do in the Originator Engine is name and create your project and holding company. You might already be working for a company that will run a project, like a non-profit, or you might be a solo Originator creating your company for the first time. Either way, we will need information about the project, like its name and description, as well as information about your company, including a description, address, and the state it will be incorporated in. If you want help with incorporating your company, we have templates and an enterprise partner that can help get it done affordably. 

Regardless of your project type, you will need to know the site where it will be implemented. Once you have an idea of where you think you will put your project, you need to obtain approval from the site owner to place it there. This is what we call site control. In some cases, an Originator might already own the site (e.g. building, parcel of land) where they want to place their project, but in many cases, this process of obtaining site control involves close communication with the owner of the site to achieve express approval. Establishing a good, stable relationship with a site owner is recommended, as it is a key piece of managing the decades-long lifespan of your project.

Once you establish site control, you can get into the details of putting the pieces of your solar system together through sizing your system, finding an installer and offtaker, and calculating costs and earnings of your project. You can gauge the size of your system in terms of kW capacity. For example, community-scale solar projects normally fall between 50-500kW. With site control and a size estimate, you can take steps towards finding a solar installer on a free site like [EnergySage](https://www.energysage.com/), or reach out for a Raise Green recommended installer. Moreover, an installer is one of the first partners we recommend engaging since you’ll need licensed professionals to design, engineer, and build the system.

Installers will provide you with a bid for how much it costs to install your system, but the costs of your system extend beyond installation costs (more to be mentioned in part 2). In fact, the solar ‘soft costs’ as they’re called account for an average of about 62% of the cost of going solar. And that’s a main reason why Raise Green exists, to help reduce these costs and make it more affordable and accessible for communities to get clean energy, especially disadvantaged communities. Installers will also help you finalize the design of your system, a necessary step towards finding an offtaker that will purchase your electricity. 

If you’ve made it this far, continue on to part two of the blog coming soon. In our next part, we’ll dive into finding an offtaker, projecting financial costs and earnings, finding partners, and finalizing your project story to sell securities on our marketplace.

As always, feel free to engage us in conversation and send any questions or comments you might have to info@raisegreen.com.

To get the most up-to-date information on Raise Green content, please [sign up to our email list](http://eepurl.com/dFst3T) and follow any of our social accounts ([Instagram](https://www.instagram.com/raisegreeninc/), [Twitter](https://twitter.com/RaiseGreenInc), [Facebook](https://www.facebook.com/RaiseGreenInc/), [LinkedIn](https://www.linkedin.com/company/raisegreen/)). 


How to Create a Clean Energy Project in Your Community, Part 1: From Inception to Installer

How to create a clean energy project in your community, part 1: from inception to installer

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