Frequently Asked Questions
Frequently Asked Questions
Solarcollab Introduction
SolarCollab™ is a solar project development, investment and funding platform designed to raise capital for the acquisition of solar energy projects located in different countries around the world. Solarcollab.com is a digital investment ecosystem comprised of multiple financial technology platforms designed to lower the costs of developing, financing, operating and managing commercial, community, utility and battery storage solar energy projects. The SolarCollab ecosystem leverages blockchain technology through the digitization of targeted points along the solar energy asset value chain to create a more efficient solar project development business model.
Caig Donnelly and Ivan Pasev are the co-founders of Solarcollab Global LLC.
Solarcollab Global is a Limited Liability Company (LLC) registered in the State of Delaware. We have offices located in Charleston, South Carolina USA, Sofia Bulgaria, Paris France, Rajasthan India and London UK. We are actively seeking country partners to establish a presence in other locations throughout the USA and additional areas in Europe, Africa, Asia and South America.
Solarcollab is in the process of registering their offerfings with the US securities and exchange commission. Solarcollab will sell both securities and investments between investors and issuers (the project owners). With Solarcollab, investors can invest their money in an uncomplicated and future-oriented solar energy project. It is possible to invest in securities as well as subordinated loans (investments) from a wide variety of issuers. In this way, investors can diversify their portfolio and have the option of attractive interest rates without any disadvantage for people and the planet. Solar project owners, in turn, receive financing or partial financing via our platform with which they can implement socially and ecologically sustainable solar projects, either through their development, engineering, equipment purchase, installation and/ or construction, operation and/or maintenance of the solar energy project. Each solar energy project either generates cost savings or generates income.
The whole investment process is done online. This is faster, cheaper and saves a lot of time and work, hard costs and lowers the cost and time of logistics.
There are many categories of solar energy projects that are waiting to be financed around the world and many people who want to invest their money in sustainable, meaningful investments while earning a profit. Solarcollab creates a space in which project owners and investors meet in order to close this financing gap together. We provide the technical infrastructure and the necessary know-how to do it. We team up with country specific solar developer partners who identify to protect the flow of money and ensure lean and smooth processes. Solarcollab earns platform management fees for the services we provide. Information on fees is fully disclosed to each investor during the investment process.
At Solarcollab, sustainability and clean renewable energy is part of our DNA. Since our founding in 2014, our focus has expanded from CO2 savings to sustainability on the whole. In doing so, we have made the United Nations Sustainable Development Goals our mission.
When selecting our solar energy projects for financing, we always follow strict social and ecological criteria. This is how we ensure that our investors only finance projects that contribute to a sustainable future. First and foremost, our investment projects must have an above average positive financial return, a positive impact on people, the environment and the climate. Our focus is on the careful use of solar energy.
Solar Energy Basics
Solar “energy” is a more generic term compared to solar power. Any technology that converts the sun’s energy into a form of energy— including solar power technologies -- is considered "solar energy". Solar thermal for water heating, space heating and cooling, and industrial process heat is all considered to fall under solar power technologies. Solar energy includes solar daylighting and even passive solar that uses building orientation, design and materials to heat and cool buildings.
Solar energy systems refer to any technology that converts the sun’s energy into another form of energy, such as heat or electricity. A solar power plant is based on the conversion of sunlight into electricity, either directly using photovoltaics (PV), or indirectly using concentrated solar power (CSP).
kWh is a measure of energy, whilst kW is a measure of power.
DEPCOM is an acronym where each letter in the term "DEPCOM" represents a phase of a solar project life cycle from beginning to end. Development is the first phase of a solar energy project . Engineering comes next. Procurement of equipment follows. Construction of the solar project comes next. Operations and Maintenance are the last two phases for all solar energy projects.
Solar panels- Inclusion of more than one solar cell connected either in series or parallel connection.
Solar farms are large scale solar installations where photovoltaic (PV) panels, referred to as solar panels, or other means of collecting solar energy, like concentrating solar systems are used to harvest the suns power. They’re different than rooftop solar systems and even commercial solar power systems in a number of important ways.
Solar farms are also known as solar parks and solar power stations. They operate as power plants, just like a natural gas power plant or other sources of energy generation that have generated electricity for consumers for the last century.
Solar farms are large scale solar installations where photovoltaic (PV) panels, referred to as solar panels, or other means of collecting solar energy, like concentrating solar systems are used to harvest the suns power. They’re different than rooftop solar systems and even commercial solar power systems in a number of important ways.
Solar farms are also known as solar parks and solar power stations. They operate as power plants, just like a natural gas power plant or other sources of energy generation that have generated electricity for consumers for the last century.
Solar Energy Investing
The initial cost to develop a community or utility scale solar energy project is quite expensive. However, once they are constructed they are not that expensive to operate and maintain for the next 25 years. One of the ways that we fund these solar projects is through crowdfunding. In general, the term crowdfunding refers to any online-based, collective investment by multiple people (i.e. the crowd) for a specific project. Solar project developers or owners present their projects on the Solarcollab crowdfunding investment platform in order to solicit financial support from the general public. As each solar project generates clean renewable electricity, the electricity is sold to the local utility or third-party commercial entities under a long term contract. The revenue from these revenue streams are used to initially pay for the operating and maintenance expenses of the solar energy system. The rest of the revenue is used to pay down for the project financing, debt, taxes and administration or the solar asset.
We are in the process of updating the answer to "How is my investment income paid to me?"... this section will be complete by February 14, 2021.
We are in the process of updating the answer to "How liquid is my initial investment?"... this section will be complete by February 14, 2021.
The internal rate of return is a metric used in financial analysis to estimate the profitability of potential investments. The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis. IRR calculations rely on the same formula as NPV does.
When you invest with Solarcollab, you are buying a piece of a solar energy power plant, similar to buying a piece of real estate. You have "equity" in the project and literally and legally own a portion of it. Investments in "real assets" such as this are inherently illiquid. The objective is to put long-term savings and investment capital "to work" by investing in a diversified portfolio of solar energy projects and collecting dividends over a long period. That said, if an investor desires to sell their stock in a portfolio during the operational life of an investment, Solarcollab will make commercially reasonable efforts to buy that stock from the investor according to the terms and conditioned set forth in the Reg A Offering Circular for each investment. Solarcollab is actively working on a secondary market option for the purchase and sale of these stocks by and between platform investors.
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
Solarcollab Investment Platform
We are in the process of developing our the Solarcollab Investment Platform. We are in currently in a private beta mode where a small number of investors are participating in beta testing our platform. We expect to be open to the public 2nd quarter 2021.
You can open an investment account by registering from this webpage; https://solarcollab.asia/invest/
We are in the process of updating the answer to "What is a Solarcollab investment advisor?"... this section will be complete by February 14, 2021.
The Solarcollab Digital Wallet (SDW) is under development. We expect the SDW to be available to the public 2nd quarter 2021.
We are in the process of updating the answer to "What is the fastest way to make an investment?"... this section will be complete by February 14, 2021.
every $1 invested in the solar energy portfolio. Each solar energy portfolio will be formed as a Special Purpose Vehicle (SPV) Limited Liability Corporation (LLC) that will be formed in the State of Delaware. As each solar energy project is constructed and begins to generate electricity, each kWh of electricity will be sold to a contracted buyer also called an "off-taker". Solarcollab will collect the revenue generated from the sale of the electricity to the off-taker, and will first use those funds to pay for the solar project's operating expenses, and then secondly the remaining revenues will be used to create a reserve fund that is paid to each investor based on the percentage of shares they have purchased of that particular solar energy portfolio.
A Solarcollab Solar Energy Portfolio (SEP) contains a mix of commercial, community, and/or utility scale solar energy projects. Each SEP will be formed as a Special Purpose Vehicle (SPV) Limited Liability Corporation (LLC) in the State
Financial Technology Advantages
Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones. Fintech, the word, is a combination of "financial technology".
Fintech Examples:
- Crowdfunding Platforms. Companies like Kickstarter, Patreon, GoFundMe and others illustrate the range of fintech outside of traditional banking.
Blockchain and Cryptocurrency. - Mobile Payments.
- Insurance.
- Robo-Advising and Stock-Trading Apps.
- Budgeting Apps.
We are in the process of updating the answer to "What are Solarcollab's Fintech Advantages?"... this section will be complete by February 14, 2021.
Blockchain – 7 Benefits for the Financial Services Industry
Instant Settlements. ...
Improve Capital Optimisation. ...
Reduced Counterparty Risks. ...
Improved Contractual Performance due to Smart Contracts. ...
Increased Transparency. ...
Increased Financial Solutions in terms of Crisis. ...
Reduced Error Handling and Reconciliation.
US Securities and Exchange Commission
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages the term "security" is commonly used in day-to-day parlance to mean any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equities and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants.
Securities may be represented by a certificate or, more typically, "non-certificated", that is in electronic (dematerialized) or "book entry" only form. Certificates may be bearer, meaning they entitle the holder to rights under the security merely by holding the security, or registered, meaning they entitle the holder to rights only if he or she appears on a security register maintained by the issuer or an intermediary. They include shares of corporate stock or mutual funds, bonds issued by corporations or governmental agencies, stock options or other options, limited partnership units, and various other formal investment instruments that are negotiable and fungible.
(Source: Wikipedia )
In 2012, President Obama signed the American JOBS Act into law, which had 10 provisions to improve the working outlook and overall financial opportunities for Americans. Title IV of the JOBS Act, also referred to as Regulation A+, allows companies that want to raise between $3 million and $75 million* to do so from anyone – regardless of assets and income levels.
What is Title IV of the JOBS Act?
Title IV allows startups and later stage companies to use equity crowdfunding platforms to raise as much as $75M* from both accredited and non-accredited investors.
Title IV is broken up into two tiers, Tier 1 and Tier 2. Tier 1 allows you to raise up to $20M while Tier 2 allows you to raise up to $75M*. Check out the key differences between the two tiers below.
Tier 1 - Raise up to $20M
- Anyone can invest worldwide
- The company can publicly advertise
- Financials required
- Must satisfy Blue Sky laws in each US state that investors live in
- No limit on investment amount by main street investors
Tier 2 - Raise up to $75M*
- Anyone can invest, worldwide
- The company can publicly advertise
- No state registration required
- Requires Audited Financials
- Non-accredited investors are limited to 10% of income/net worth per year
Can anyone invest?
Yes, now anyone can invest in startups if they fundraise under the Title IV Regulation A+ exemption.
(Please note that the regulations of your country may restrict you from investing via Reg A+ offerings. As an investor, you must check the regulations that apply to you, in your country.)
Do I need to verify my investor status?
No, but If you are an accredited investor you will have more flexibility about how much you can invest.
What steps do I need to take with the SEC if I want to raise capital using Regulation A+?
See the steps below for Tier 1 and Tier 2 of Title IV:
Tier 1
- File a disclosure document and get qualification from the SEC
- Have your financials reviewed
- Must register for Blue Sky laws in all states investors invest from
Tier 2
- File a disclosure document and get qualification from the SEC
- Provide audited Financials
- Disclosure requirements: annual, semi-annual and current reports
What restrictions are there for non-accredited investors investing in Reg A+ deals?
For Tier 1, the investor has no restrictions on the amount they invest.
For Tier 2, non-accredited investors have caps on how much they can invest. They can invest a maximum of 10% of their annual income/net worth per year, depending on which is greater.
Rule 506(b) of Regulation D is considered a “safe harbor” under Section 4(a)(2). It provides objective standards that a company can rely on to meet the requirements of the Section 4(a)(2) exemption. Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors. An offering under Rule 506(b), however, is subject to the following requirements:
no general solicitation or advertising to market the securities
securities may not be sold to more than 35 non-accredited investors (all non-accredited investors, either alone or with a purchaser representative, must meet the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment)
If non-accredited investors are participating in the offering, the company conducting the offering:
must give any non-accredited investors disclosure documents that generally contain the same type of information as provided in registered offerings (the company is not required to provide specified disclosure documents to accredited investors, but, if it does provide information to accredited investors, it must also make this information available to the non-accredited investors as well)
must give any non-accredited investors financial statement information specified in Rule 506 and
should be available to answer questions from prospective purchasers who are non-accredited investors
Purchasers in a Rule 506(b) offering receive “restricted securities." A company is required to file a notice with the Commission on Form D within 15 days after the first sale of securities in the offering. Although the Securities Act provides a federal preemption from state registration and qualification under Rule 506(b), the states still have authority to require notice filings and collect state fees.
Rule 506(b) offerings are subject to “bad actor” disqualification provisions.
Solarcollab uses SEC Regulation D 506(b) and Regulation A+ to offer stock to our investors. Both regulations allow non-accredited investors to participate. We believe that EVERYONE should have access to renewable energy investing, which is why we chose this structure. That said, in order to protect unaccredited investors from investing cash they may need, the SEC limits non-accredited investors to the higher of a) 10% of their net worth, or b) 10% of their annual income. While our standard minimum investment amount is $500, some portfolios may have different minimums.
Risk and Due Diligence
As with all investments, buying a security involves risks. There is also a total risk of loss with securities and it is advisable to familiarize yourself thoroughly with the relevant risk information before considering a purchase.
Solarcollab strives to be as transparent as possible with all investors and there are no documents that are held from an investor's due diligence review. The investment document (either a RegD Circular or a RegA Circular depending on the portfolio) is an in-depth analysis of the risks and opportunities of each portfolio and should be read "cover to cover" by all investors. Once investors fully understand the terms and conditions of the investment itself, further due diligence should be done on the projects that comprise the portfolio. Each project is summarized in an IC Memo in the files of each portfolio. Every project also has a cash flow model for your review. Project videos are designed to help investors visualize what the projects look like, where they are and how they work.
Accordion Sample DescriptionTo review additional documents for projects (like the customer contract, the EPC contract or the operations and maintenance contract) please send an email to investments@solarcollab.com. You will be asked to sign a non-disclosure and non-compete agreement prior to having access to additional documents in order to protect Solarcollab 's and our customer's property and information rights. That said, there are no documents that are not available for all investors to review.
The SAIS is a brief piece of information, like the “package insert” for the investment offered. It informs the investor on a maximum of three A4 pages about the main characteristics of an investment offered.
Taxes
Solarcollab will email and post to your user profile all documents required to file your taxes prior to January 25th of each year.
The Schedule K-1 is an Internal Revenue Service (IRS) tax form issued annually for an investment in partnership interests. The purpose of the Schedule K-1 is to report each partner's share of the partnership's earnings, losses, deductions, and credits. You will receive a Schedule K-1 for each portfolio in which you have equity.
Loans for Solar Energy Projects
One of Solarcollab's core area of expertise is Financial Technology. We are constantly researching new ways of financing and funding projects leveraging emerging technology protocols to enhance efficiencies while driving the cost of money down. We are then able to pass these savings on to our stakeholders.
Currently, Solarcollab is in the process of implementing a "subordinated loan" program to be able to offer as a financial instrument to finance solar energy projects.
A subordinated loan is basically an ordinary loan. However, certain rules apply to this loan. Particular attention should be paid to the subordination. This provides that in the event of the bankruptcy of a project owner (borrower) as subordinate creditors, investors will only be served after all other senior creditors. Subordinated loans therefore belong to a significantly higher risk class.
With subordinated loans, investors are only served after all other creditors in the event of bankruptcy. This subordinate service is also known as subordination. The loan contracts that you as an investor sign on bettervest.com are therefore loans with qualified subordination. All claims of the investor from the loan agreement - in particular the claims to repayment of the loan amount and payment of interest - cannot be asserted against the borrower if this would lead to bankruptcy for the borrower. As an investor, you therefore bear a (co-) entrepreneurial risk that is higher than the risk of a regular lender. The lender does not become a partner of the borrower himself and does not acquire any shareholder rights. It is not a so-called wage-proof participation, but an entrepreneurial participation with a liability function similar to equity.
More information on the legal basis of your investment can be found in the relevant risk information for the project.
Due to the subordination, there is always the possibility of total loss when investing in subordinated loans. It is therefore not advisable to invest all of your savings in subordinated loans, but only an amount at which you can cope with a possible total loss. A portfolio strategy is also advisable in order to spread your risk. To do this, divide your available budget over several projects from different issuers.
Basically, the higher risk is reflected in the interest rates, which are significantly higher than other asset classes for subordinated loans. Accordingly, invest your money in a risk-conscious manner and add subordinated loans to your portfolio.
It is always advisable to thoroughly familiarize yourself with the risk information before investing.
Both the return and the term are determined by the project owners (borrowers). Typically, the terms are based on the projected cost savings or income from implementing the project. In principle, these savings and income are sufficient to cover the repayment of the loan, including returns and fees. It should be possible to make repayments without an additional source of finance and within a realistic framework. For details, see the respective project description.
There are different reasons why a project owner does not go to the bank for a loan.
Many project owners, especially medium-sized companies, want to reserve their equity for important investments in day-to-day business. They also keep the credit lines at their house bank free for supposedly more important things than energy savings. From your bank's point of view, the subordinated loans that Solarcollab arranges (as so-called mezzanine capital) are also rated as equity. Thanks to the acquisition of a subordinated loan, the project owners can also receive larger loans from their bank (Solarcollab does not see itself as a competitor to the banks, but as a possible partner and beneficial addition). In addition to the financial aspects, marketing and communication also play an important role.
In emerging and developing countries, on the other hand, bank loans are often difficult to obtain or simply too expensive (interest rates of over 20% are more the rule than the exception here). In addition, local credit institutions or banks often have no experience in financing renewable energy projects or development projects. This makes applying for a loan much more difficult. At this point, subordinated loans offer an affordable and unbureaucratic alternative.
In Germany, many project owners, especially medium-sized companies, want to reserve their equity for important investments in day-to-day business. They also keep the credit lines at their house bank free for supposedly more important things than energy savings. From your bank's point of view, the subordinated loans that bettervest arranges (as so-called mezzanine capital) are also rated as equity. Thanks to the acquisition of a subordinated loan, the project owners can also receive larger loans from their bank (bettervest does not see itself as a competitor to the banks, but as a possible partner and beneficial addition). In addition to the financial aspects, marketing and communication also play an important role.
In emerging and developing countries, on the other hand, bank loans are often difficult to obtain or simply too expensive (interest rates of over 20% are more the rule than the exception here). In addition, local credit institutions or banks often have no experience in financing renewable energy projects or development projects. This makes applying for a loan much more difficult. At this point, subordinated loans offer an affordable and unbureaucratic alternative.
The majority of the subordinated loans brokered via Solarcollab are annuity loans. With annuity loans, the repayment amounts are constant, consisting of interest and repayment, also called installment payments.
The SAIS is a brief piece of information, like the “package insert” for the investment offered. It informs the investor on a maximum of three A4 pages about the main characteristics of an investment offered.
Solar Power Plant Marketplace
The Solarcollab Marketplace can be accessed by going to this url: https://marketplace.solarcollab.com/. This is where we list interconnected solar power plants (also called a solar energy system) that have already been developed, engineered, constructed and are currently online generating electricity. The electricity is from the solar energy system is also under contract with an "off-taker". An off-taker is a third party who is purchasing each kWh of electricity that the solar power plant is producing.
There is a demand for these solar power plants, and The Solarcollab Marketplace is another digital platform where Sellers and Buyers of these solar assets can connect to transact.
Contact us at marketplace.solarcollab.com.
We are in the process of updating the answer to "What's the difference between the Solrcollab Investment Platform and the Solarcollab Marketplace?"... this section will be complete by February 14, 2021.
Solar Project Development
Solarcollab presently focuses on developing ground-based solar power plants that range in size from 500 kW to 8 MW. Our sweet spot are projects that are between 2 - 4 MW.
We consider all sizes of ground based solar power parks. Our fast track DEPCOM focus is in the 2-4 MW range.
Currently we are heavily focused in solar farm development in the USA and select countries in The European Union. We have also just partnered with our affiliate, Solarcollab IREAP Pvt. Ltd in Rajasthan, India to implement a continuous funding of 500 kW - 4 MW ground based solar power plants in the State of Rajastan and Gujurat. We have also initiated solar energy portfolios in Africa and South America.
Landowners
A solar land lease is a contract between the property owner and Solarcollab that allows us to build a solar farm on your property in exchange for lease payments to the landowner. Each land lease contract is different, but generally the contract is for 20 years and sometimes there may be an option to extend the term for an additional number of years.
The power generated by the solar farm will be sold to your power grid. This could be a local co-op, large energy company, or individual company.
With the current process involving city planning and permits, along with working through details of contracts, the process can take anywhere from 6 months to 3 years. During this time you’ll be free to continue using your land.
Solarcollab will contract out the operations and maintenace for the solar farm during its life, and will remove all equipment and reclaim your property once the project has ended.
We are in the process of updating the answer to "Does a solar farm affect property taxes and if so, who pays those taxes?"... this section will be complete by February 14, 2021.
We are in the process of updating the answer to "How much land do I need for a typical solar farm?"... this section will be complete by February 14, 2021.
We are in the process of updating the answer to "What other criteria make up an ideal site for a solar farm?"... this section will be complete by February 14, 2021.
We are in the process of updating the answer to "I have multiple offers from other solar developers, how do I choose the best one?"... this section will be complete by February 14, 2021.
We are in the process of updating the answer to "How do I start the process of working with Solarcollab to learn about hosting a solar farm on my vacant land?"... this section will be complete by February 14, 2021.
We are in the process of updating the answer to "Is there an opportunity for me to own part of the solar farm that will be on my land?"... this section will be complete by February 14, 2021.
We are in the process of updating the answer to "How do I start the process of working with Solarcollab to learn about hosting a solar farm on my vacant land?"... this section will be complete by February 14, 2021.
Landowners can now leverage their property to own their own solar farm instead of only leasing their land.
We will represent your land and future solar electricity revenue as security tokens, create offers, and invite investors to finance your solar farm – all on the Solarcollab platform.