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Can crowdfunding bring solar energy to small businesses?

Can crowdfunding bring solar energy to small businesses?


Commercial solar development has trailed residential and industrial. A startup wants to change that

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Solar energy is one of the fastest growing new industries in the United States, earning a shout out from President Obama at his State of the Union speech. The president noted that it is now a bigger business than coal, and typically pays its workers a higher wage. Now a Colorado-based startup, Wunder Capital, is trying to make it easy for anyone to invest in the sun-backed-boom.

Wunder works with installers, developers, and distributors across the US to bundle a number of solar projects together into an investment vehicle. It’s aiming to fund small, commercial projects which have struggled to grow at the same rate as residential solar and big industrial deployments. "We want to be the company that unlocks that potential," said Bryan Birsic, Wunder’s CEO. "The company that knows how to go in and do these million dollar and below deals — the vast majority of US businesses need that."

This week, Wunder announced that it was also raising its own funding, a $3 million round of venture capital that will allow it to grow its team and potentially expand into new markets. As for the capital investors give to Wunder, the company is targeting 6 percent returns from its 10-year Income Fund and 11 percent returns from its 2-year Bridge Fund. Wunder says that so far it has met those benchmarks. "Actual returns have been exactly 6 and 11 percent as promised, and we have yet to miss a payment to investors since our first investments in July, 2015," said Birsic. Of course, Wunder is still a ways off from seeing the final results of its 10-year fund.

"We want to be the company the unlocks that potential."

When Birsic and his two co-founders looked at solar, they found a real scarcity of software entrepreneurs trying to solve energy problems. As part of the Techstars accelerator program, the founders created an online software platform to find and evaluate projects. According to Nicole Litvak, a senior analyst at Greentech Media, the new funding round is a positive sign for Wunder, as it continues "working to bridge the disconnect" between early stage commercial projects in need of backing and small-scale investors interested in solar.

However, there are some warning signs for Wunder, says Litvak. She notes that other companies have tried and failed to unlock the potential of the commercial solar market. They struggled to find suitable partners to invest in because commercial developers were unfamiliar with the benefits of these platforms or were unwilling to fully disclose financial information to them. Consequently, these ventures have had little effect on the commercial solar industry on the whole, which has been stagnant since 2012, despite there being plenty of rooftops and land available for solar energy use.

"Working to bridge the disconnect."

There is 30 times greater solar capacity in the US today than there was in 2006, according to data from SEIA's annual Solar Means Business report. But Birsic notes that while industrial and residential sectors in solar were experiencing triple-fold growth, commercial installations grew just 25% from 2011 to 2014. "The commercial solar installations are only estimated at $3 to $4 billion. If commercial was growing the way these other spaces were, it'd be an $8 or $10 or $12 billion dollar industry," he said.