My Investments: Mosaic

In an earlier article on nontraditional investments, I mentioned Mosaic.

When you join Mosaic, you join a group of investors that are lending money for solar power installation projects.  As the loan is paid back, you receive principal and interest.  Because of the sustainability theme, Mosaic may be popular among those who would consider a Socially Responsible Investing (SRI) strategy.

I joined Mosaic in September 2013, and so far I have invested $500.

Investment Structure

Like Lending Club, investments are made in $25 increments, called Notes.  Each investment lists a bunch of information about the proposed installation:

Most Notes so far are 120 months in duration—investors will receive interest at the specified rate for the next 10 years.  The projects I have invested in offer projected rates of return of 5.5% and 5.75%, and there have been projects with rates of return as high as 7%.  Compare this to 2.53% for a 10-year US Treasury bond.

Investment Availability

The number of available projects to invest in is, so far, in the low single digits.  At the time of this writing, there are two projects available to fund:

Due to federal investment rules, who can participate is also restricted by state of residence. Unfortunately, you must be a resident of California or New York or an Accredited Investor (income >$200k, net worth >$1MM) to participate. Mosaic is working hard to expand participation.

A solar project may be seeking to raise hundreds of thousands of dollars, so you could potentially invest a lot of money on Mosaic.  The investment would be poorly diversified, but most of these projects have insurance on the solar components and, in some cases, a performance guarantee from the component manufacturer.

My note for an installation on a U.S. Foods building in Albuquerque, NM was issued on October 22, 49 days after I purchased the note on September 3rd.  Fifty days is a long time for money to sit without earning interest!

Second Opinions

Mosaic is extremely new, so there's not a ton of information out there.  Check out the following:


For me personally, the slowness of note issuance and lack of investment diversification is compensated for by Mosaic's high rates of return and clean energy focus.  The long investment period and stable returns may make them a reasonable alternative to bonds.  From a psychological standpoint, it's cool to fund a productive asset that will actually be built somewhere and continue to make electricity for many years.  Mosaic is also based in Oakland, not far from me.

Once again, if you're just looking to start investing, don't even think about it.  Off to index mutual funds you go!

It's too early for me to wholeheartedly recommend Mosaic, but the concept is intriguing.  I'll keep putting money in and let you know how things look six months from now.  For updates straight from the source, sign up for Mosaic or follow them on Twitter or Facebook.