Preferring not to wait for sweeping federal action to transition the U.S. to renewable energy, an Obama adviser and Yale scientist have created an investment platform, Raise Green, to fund local projects.
Of all the catastrophes that might catch governments by surprise, climate change won’t be one of them. Each year brings a new chorus of warnings from experts, and to some, a missed opportunity for preventive measures. A 2018 report by the sustainability-focused nonprofit Ceres called for an additional $1 trillion of investment, globally, every year until 2050, to prevent global temperatures from rising by more than 1.5 degrees Celsius. Seeing the writing on the wall, and given doubts about the U.S. government’s leadership on that front, a new crowdfunding marketplace for green-energy projects is proposing to help investors, businesses and governments take action at the state and local level.
That could mean, for example, a city crowdfunding to put solar on the roofs of buildings it owns, or perhaps for green infrastructure to help deal with stormwater.
The marketplace is called Raise Green, announced today and co-founded by Franz Hochstrasser, an eight-year veteran of the Obama administration in various roles, including on the White House Council on Environmental Quality. Hochstrasser told Government Technology the Raise Green website is a product of discussions between him and his co-founder Matthew Moroney, a data and climate scientist he met at Yale. Hochstrasser said they originally intended to create a network of mobile air quality sensors to raise awareness about air pollution and climate change, but they quickly realized a more important piece would be convincing individuals to actually get involved — to “do something.”
“We feel pretty strongly that we’re in an unprecedented and catalytic time in history,” Hochstrasser said. “From our perspective, this is a defining decade in the fight against climate change, and Raise Green is a sort of local Green New Deal that can be implemented right now, as opposed to waiting for the federal government to take action.”
Having participated in international climate negotiations, including the Paris Agreement, Hochstrasser said one of the biggest hurdles to green infrastructure and climate-related projects is financing. With that in mind, he and Moroney founded Raise Green in early 2018 and spent two years developing it at the startup incubator Greentown Labs. Hochstrasser described the platform as a two-sided marketplace: one side for investors, launching today, and the other for project creators, or “originators,” which will roll out as a software-as-a-service tool over the course of the summer. It's a kind of “TurboTax of project finance,” Hochstrasser said, that walks someone through the process of creating, financing, building and running their clean energy project.
To get a project listed on the site, originators — meaning business owners, nonprofits, local governments, school districts or anyone who wants to own and operate a clean energy project — must set up a consultation with Raise Green, which will then assess the project’s revenue, ambition, impact and social and environmental metrics. R.A.I.S.E. metrics, if you will.
“We have around 50 or so folks that are playing that [originator] role right now,” Hochstrasser said. “They’re everyone from a first-time developer who’s got an idea for how they can help their local grocery store, to folks who have developed tens or hundreds of solar projects, and are using this as a more inclusive way to do that.”
On the investment side, Hochstrasser clarified a point about crowdfunding. Unlike Kickstarter, GoFundMe or other donation-based platforms, he said, this is a true investment platform that sells debt notes or equity stakes in clean energy projects, with a minimum investment determined by the project originator. The website lists six project categories, including solar power, affordable housing, EV charging stations, agriculture, water projects and microgrids. Hochstrasser said the public can browse available projects, but in order to invest and view all the details, one needs to create an account on the website with information that will enable Raise Green to verify their identity.
“It’s flipping the script on traditional finance, where an individual who’s looking for financing will go to a bank and present themselves, and the bank decides based on an algorithm whether they qualify for a loan,” Hochstrasser said. “Whereas, in this case, an individual or organization looking to start their own clean energy project can come to us, get the proper resources for creating and developing that project through our originator engine [software], then set the terms that they want to see, and turn it out to the crowd and find out if the crowd wants to see that project in the world.”
One of the people responsible for validating projects, MIT Media Lab researcher and entrepreneur John Clippinger, extolled the Raise Green platform as the first of its kind, creating opportunities for a wider range of people to invest in clean energy.
“One of the most significant ways to ensure we can tackle climate change is by empowering as many people as possible to invest in sustainable, energy-efficient solutions,” Clippinger wrote in an email. “Raise Green is the first impact investment marketplace for green infrastructure and clean energy projects to allow ordinary Americans and institutional investors to put their resources together to make a demonstrable impact in fighting against our climate crisis.”
Hochstrasser said Raise Green has recruited a little more than 100 investors to the website so far, and a mailing list of about 3,000 who are interested. With about 50 projects in the pipeline, most of them community-scale solar projects between the sizes of about 50 and 500kW that have yet to be finalized, the platform has one project available to investors at the moment. The National Energy Improvement Fund (NEIF), a public lender, is offering loans to families and small businesses to add energy efficient retrofits and upgrades for HVAC, roofing, lighting, battery storage and other purposes. The minimum investment is $1,000, which will go toward helping NEIF expand its programs and personnel and extend its loan offerings to more low- and moderate-income borrowers.
According to Hochstrasser, the clearest opportunity for state or local government with Raise Green is on the originator side. For example, he said they could create their own projects and seek investment from citizens, or buy the electricity generated from a citizen’s project.
“There are … a lot of places that municipalities hold the deeds to, and if they were willing to make those available for local entrepreneurs to create their own green jobs and start a climate solution project using that land, that could be an excellent ecosystem to create,” Hochstrasser said. “Or if they have a building they want solar on, but the city or state budget can’t afford it at the time, they could make that rooftop available and lease it to a local citizen, who would create a project company and could raise the money on Raise Green, and enable anyone to own a piece of. Then, effectively, you have citizens selling clean electricity to the city and benefitting from the payout and ownership of that.”
Observing a recent trend in the financial industry of growing interest in environmental and social governance, of investing in projects that create value beyond their financial yield, Hochstrasser was hopeful that he’d made a platform to connect good will with opportunity.
“This is a way for those impact investors to find locally impactful projects that are verifiable and that demonstrate the kind of change they’re trying to create with their dollars,” he said.
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