By Holly Dutton
Two Columbia University doctoral students are venturing into the green start-up world with an idea that first took shape over a couple of beers.
Earth and environmental engineering post-graduate students Kyle Fricker and Rob van Haaren recently founded Divvy, a crowd-sourcing website that funds solar and clean energy projects.
“It’s like the Kickstarter platform, but instead of creative projects it’s focused on clean energy projects,ˮ said Fricker. “People can bring ideas to the website to get them funded.ˮ
The first project on the company’s website, divvysolar.com, is for the Bronx Design & Construction Academy in the South Bronx that is raising funds for a green roof and solar panels for students researching the mutual benefits of green roofs and solar panels.
An old friend of Fricker and van Haaren from Columbia is a teacher at the school.
Supporters of the project can contribute a minimum of $10, and even choose on a diagram which individual solar panel they will be supporting. So far, the project is 61 percent funded.
Already friends through school, Fricker and van Haaren would often spend time at a local rooftop bar on the weekend, discussing startups and clean energy, subjects the two are both very interested in.
“I had this idea how we could potentially crowd-fund for solar energy projects,ˮ said van Haaren. He was inspired by a story from the early days of the Internet, when a couple of young entrepreneurs started a one megapixel website where companies could donate pixels to them, $1 at a time. The site eventually raised $1 million from several companies and individuals.
“His website is a very interesting thing to see,ˮ said van Haaren. “It’s like a piece of art. I thought that the same model could be applied to the rooftop of a building.ˮ
The two began slowly building on the idea for a year and a half, spending a couple hours every weekend working on it, while in the midst of writing their dissertations.
“We both built it up by ourselves,ˮ said Fricker. “It’s fun for us to kind of figure this all out. In order to build our credibility and move towards our final goal, we started the platform to fund smaller, community-centered projects.
“We’re both very excited about them because we’re excited about educating future generations about clean energy.ˮ
In light of recent legislation regarding crowd sourcing, the duo has a group of advisors they rely on for consultation on SEC regulations. “The original plan was that we wanted everyday people like you and I to purchase a piece of the solar array and accept economic benefits and receive money from what it produces,ˮ said van Haaren.
“If you’re giving people a return on their investment, then people are getting equity, and we thought we’d distribute the dividends back to the investors.ˮ
In July, the SEC voted to finalize Title II of the recent JOBS Act which essentially lifts the ban on public solicitation and creates a new offering called 506(c) that allows companies to freely advertise to the general public that they are fundraising.
For now, contributors to Divvy projects will receive incentives, like a t-shirt or coupon. “Say if a local bar wanted to crowd fund panels for roof,ˮ said van Haaren. “If you contribute to the solar array you get a free beer every month.ˮ
“There’s kind of a problem as far as the number of projects that are ready and the financing for those projects,ˮ said Fricker. “Part of that is the cost of financing via traditional methods like bank loans. Crowd funding and sourcing money is a very cheap source of capital, and most solar developers we talk to get very excited when they hear this idea.
“Once we figure out how to really incentivize it – like if you invest over 20 years in solar panels and make 5 percent interest in loan – you would be incentivized to make that investment. So it’s a win-win for them.”
As the company grows, the two are looking to partner with commercial developers on large projects.
“At that size, you really get a serious financial incentive because of the economic scale with solar,” said Fricker. “We personally think it would be very worth it if they didn’t have to worry about the financial side; they’d have the benefit of solar panels, cheaper electricity, publicity, and without capital investment. It’s more bang for your buck.”
They’re also looking to speak with building owners and managers.
“In an apartment building, either condo or co-op, if residents were motivated to bring solar to the roof, they could use the platform and all contribute,” said Fricker.
