[HN Gopher] Legends Solar - Buy operating solar panels on commer...
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Legends Solar - Buy operating solar panels on commercial solar
farms
Author : justicz
Score : 72 points
Date : 2022-05-31 20:40 UTC (2 hours ago)
(HTM) web link (www.legends.solar)
(TXT) w3m dump (www.legends.solar)
| ncmncm wrote:
| I thought this was going to be about solar panels installed
| synergistically on food farms, running more efficiently because
| of the lower temperature, and increasing farm yield by reducing
| heat and water stress on the plants. (Most plants can turn only a
| fixed maximum of photons into sugar, daily, easily exceeded in an
| hour or three of full sun, with exposure after just endured.)
|
| There is a clever form of this where the panels are mounted
| vertically in fencerows running north-south. The "bifacial"
| panels collect both morning and afternoon sun, with room between
| for a tractor.
|
| Another form is to mount the panels horizontally directly above
| the plants, so they get sun only in morning and afternoon, and
| are protected from harshest noon light, and also freak
| hailstorms. The panels are cantilevered out from both sides of
| fenceposts running down a row, with the tractor driving in space
| between rows and running its attachments under.
|
| In pasture you can do whatever is cheap, so long as the herd can
| get to grass under them. The herd might also do better with less
| exposure, and they keep the weeds down.
|
| Usually there is a little less room for the plants, per acre, but
| possibly higher yield anyway, and the field produces saleable
| power year round. The panels are not as close together as in a
| dedicated solar farm, but dual-use land is free, so there is no
| need to scrimp.
|
| It is easy to find loud complaints in England about farms that
| have converted 100% to solar because it makes the farmer more
| money than actually farming. This seems like a good compromise.
| Vladimof wrote:
| Why would you think that natural photosynthesis is worst then
| artificial one?
| eointierney wrote:
| I don't think it's "worse" is the intention, but rather that
| we need electricity as well as photosynthesis, and combining
| the two effectively is efficient for us. And now "it from
| bit" rears its beautiful head.
| [deleted]
| turtledove wrote:
| Because natural photosynthesis is more complex and is in
| service of growing a plant, so it only needs to run for a
| little part of the day. It also takes water and needs to be
| protected from pests, diseases, and herbivores.
|
| But it also sequesters carbon, and if planted well can be
| entirely self sustaining.
|
| So, neither is better, both are good. We need to plant more
| trees and place more solar panels.
| ncmncm wrote:
| Who thinks that? But solar panels can convert north of 20% of
| incident light to usable power. The most efficient known
| plant chemistry can convert 4% of incident light to sugar,
| the principal constituent of cellulose. Most plants are at
| 2%. But of course we have needs for such output not satisfied
| by electric current.
| sremani wrote:
| Good Idea, for those who live in places that are not optimal for
| Solar on the roof , they can fund one of these and feel good
| about it. The biggest problem is the green-washers have unlimited
| marketing budgets.
| RyEgswuCsn wrote:
| Is this... technically "securitization of the weather"?
| spinaltap wrote:
| At the end of the day, it all comes down to ROI. If this had a
| good ROI, it probably already attracted enough investors without
| needing to create such a investment product. If not, then I might
| as well buy SP500.
| Bluecobra wrote:
| One interesting thing I found is that there is a downward trend
| for electricity prices (adjusted for inflation) for the last 40
| years so it doesn't seem like there's no future growth:
|
| https://www.usinflationcalculator.com/inflation/electricity-...
| gisely wrote:
| I strongly disagree. I would quite happy to invest a venture
| like if I was confident it would help us make a transition to
| renewable energy faster, even if the ROI was significantly
| worse on average than S&P. My concern is how do I know that
| buying solar panels with them will actually help to increase
| the percent of renewable energy being supplied by the grid. I
| don't want to just help some commercial investor who has built
| out a solar project recover the capital they've put into it
| unless they'll guarantee they are going to put that capital
| back into building more renewable generation.
| skybrian wrote:
| You can say that about any ESG investment, though.
|
| Matt Levine writes about this sometimes. One possible
| justification to invest in ESG is that you believe that
| investments that are relatively good for the environment (or
| whatever) will beat the stock market. Another justification is
| that it makes the cost of raising funds cheaper for companies
| that are good for the environment and more expensive for
| companies that are worse for the environment.
|
| According to the latter theory, if it's working, you _should_
| earn less than the S &P 500. If you're not earning less, you
| haven't lowered the cost of raising funds.
|
| (On the other hand, if a company is advertising a niche
| investment to small investors, they probably have a cost of
| customer acquisition that's going to be cutting even more into
| investment returns? Isn't their cost of raising funds going to
| be pretty high?)
| dqpb wrote:
| This sounds false. Couldn't you make the same argument about
| the entire stock market?
| JamesBarney wrote:
| This doesn't apply to the stock market because the stock
| market is the alternate investment for retail investors.
|
| But this does apply to most investments. Most investments
| that are looking for retail investors are scams. If they
| delivered ROIs better than or as good as the S&P they'd
| attract large sophisticated investors.
| coda_ wrote:
| The return, for some people, will be more than the just the
| money though (because they'll attribute some value to the green
| aspect). For them it doesn't necessarily have to beat the
| SP500. The sum of the money earned and their perceived green
| value will likely have to exceed it, I agree.
| martythemaniak wrote:
| Radio On Internet?
|
| Joking aside, why would that be? They're creating an investment
| vehicle that pays 7% return subject to various conditions and
| taking some cut for themselves. You can't just assume that all
| investments are already fully sold on the market and no one can
| create new ones.
| elil17 wrote:
| ROI is only one factor - the other is risk. These are an
| interesting asset because, while they have some risk, that risk
| is at least partially decoupled from market risk. It could also
| be a hedge against energy prices rising (depends how the power
| purchase agreement is structured).
| smt88 wrote:
| ROI is not knowable ahead of time. This might fit one person's
| risk profile and not someone else's.
|
| It's also a good asset for people who are OK with lower returns
| if the investment slows climate change, or for people who want
| to make a bet that solar will be in higher demand in the
| future.
| agucova wrote:
| Note that ROI is not the only criteria for investment. Some
| people invest on lower ROI investments if they think the
| positive externalities align with their values, and risk is
| just as important as ROI anyway.
|
| While I don't think this investment is effective either way,
| there is probably a market for people that want a more visible
| way to track their impact.
| yepnopemaybe wrote:
| It might be useful to think of Legends Solar panels as a kind
| of fixed income security. It depreciates over time but produces
| a steady stream of dividends. Significantly lower risk than the
| stock market, but with somewhat predictable returns.
|
| The important thing we hope to capture is the experience...
| it'll feel much more like owning a consumer product than an
| investment.
| tims33 wrote:
| Really like the idea that you're making a bet on the commercial
| return of these panels. Obviously, it doesn't have the advantage
| of something like Net Energy Meeting, but that is only available
| in a few places anyway.
|
| To me, the most important thing would be assured that this
| investment truly creates new panel installations vs just being an
| arbitrage play on reselling existing solar capacity. Is there
| anything about this program that ensures the solar panels create
| net new capacity?
| yepnopemaybe wrote:
| This is high on our minds, as well. Particularly as we add
| dozens or hundreds of facilities, an important question will be
| how the investor chooses (they will likely all have similar
| economics).
|
| For our first offerings, we will likely purchase existing
| facilities or contribute financing to new ones. Over time, we
| hope to select facilities where our member's additive benefit
| is more clear.
| dsr_ wrote:
| In what ways is this better than investing in a hypothetical
| public utility that intends to make all its electricity from
| solar panels?
|
| In what ways is this worse than that?
| GOONIMMUNE wrote:
| > investing in a hypothetical public utility that intends to
| make all its electricity from solar panels?
|
| Is this something I can do as a retail investor? What sort of
| minimum investment is needed?
| foobiekr wrote:
| This is basically a variation on the SolarCity business model,
| but focusing on commercial properties. There is probably a
| business here, but not one that tries to recruit individual
| investors because it will only be profitable at scale, and the
| kind of financial backing needed to do this is available to
| qualified teams. The recruiting individuals thing is basically an
| admission that this team does not have access to that kind of
| backing.
|
| A perusal of the LinkedIn profiles for the team shows a set of
| people with no relevant experience and probably no business
| running this kind of company. The low dollar amounts also
| emphasize this aspect.
| yepnopemaybe wrote:
| We've lined up a number of finance partners to help facilitate
| transactions. Our first priority on our seed raise will be to
| bring some qualified finance experts in house.
|
| We've been working with accredited investors who are making
| 100K+ investments for entire solar facilities. We think of
| those transactions as our training wheels as we build out our
| software, financial knowledge, and design.
|
| As we evolve to a larger scale we will certainly bring on
| specialists to support the product.
| arcticbull wrote:
| I see, your argument is that like (for instance) LendingClub,
| the economies of scale always favor large investors, and that
| this platform simply cannot get large investors onboard. That
| may be due to a lack of connections, or due to some other
| potential fundamental issues with the business model. At the
| end of the day if the business is sound it makes more sense to
| target fewer large investors - not many, smaller ones. If this
| model makes sense, it would probably just pivot like
| LendingClub and cut off access for small investors. And if not,
| small investors will be holding bag.
|
| I buy that.
| foobiekr wrote:
| No one in their right mind wants to build a pseudo-investment
| company dealing with tons of small investors in the few
| hundreds of dollars to few thousands of dollars range. The
| only thing missing here is a crypto coin.
|
| If they really have a business model that can yield 8+%
| annual, assuming they get a cut, then they would raise real
| capital and not deal with randos. They don't.
| yepnopemaybe wrote:
| We will never work with crypto because we care about our
| investors and don't intend on defrauding them.
|
| There are plenty of small retail investing companies that
| deal with small account sizes. Acorns, Robinhood, etc. come
| to mind. Over time, I'd hope that our average account size
| would be in the 10K+ range, but depending on CAC, small
| dollar would be fine.
|
| Our innovation here is investment UX. The realized return
| might be a point or two north or south of 8% depending on
| the risk profile we go with - not far off course for the
| industry. Our current accredited investors get about 10%,
| but that's with tax equity incentives we might not be able
| to pass to retail investors.
|
| We will be 100% transparent about our pricing model.
| yepnopemaybe wrote:
| What we are doing is super simple. Equity ownership in real,
| operating solar panels. There is nothing particularly
| synthetic or structured about these investments (i.e. like
| BNPL, etc.)
|
| We need enough scale to move a large (20M+) facility, but
| beyond that scale will only help insofar as bringing on
| follow on investments and referrals becomes a bit easier. We
| may also do some institutional stuff, but for the time being,
| we are 100% consumer focused and always will be.
|
| Our innovation is to bring a consumer experience and true
| design focus to investing. Instead of treating retail
| investors like tiny little hedge funds, we design the product
| to match their expectations of what 'ownership' should be.
| foobiekr wrote:
| That is not a competitive differentiator.
| yepnopemaybe wrote:
| Show me where I can buy an operating solar panel if I
| don't have a suburban rooftop. Would make my life so much
| easier!
| PragmaticPulp wrote:
| > The recruiting individuals thing is basically an admission
| that this team does not have access to that kind of backing.
|
| I would assume they plan to finance the large installations and
| then pay off the financing by re-selling the projects to retail
| investors in increments mapping to approximately 1 panel.
|
| In theory they'd only need to keep enough working capital to
| fund installations until PTO (power turn on) at which point
| they could "sell" them to retail investors and turn over the
| capital for the next install.
|
| In practice I'd be worried about what happens if (or when) the
| company goes out of business. Does my initial investment
| disappear and someone else now owns the solar installation?
|
| This feels like an offer to become an investor in a risky solar
| install without any of the actual rights that come from being
| an investor in a solar install. If the company fails for
| whatever reason, your solar install goes to the company's
| investors and you get nothing.
| phrz wrote:
| This is like a high-tech version of the orange grove that sold
| investment contracts for the harvest of oranges in the famous
| _Howey_ case
| coda_ wrote:
| Very cool concept, I can see a lot of people being interested in
| this. The site does a good job of simplifying things to make it
| very accessible as well. After poking around in the FAQ, I don't
| see anything about selling your investment if you want out. Once
| you "purchase" some panels/shares, how and where do you sell
| them? And how is the price of that sale determined? Look forward
| to learning more about this.
| yepnopemaybe wrote:
| I can't guarantee a secondary market quite yet, certainly not
| on launch, but it's something that will be a priority. I may
| find a way to build in liquidity short of a secondary market
| (our accredited investors have a 7 year term).
| tekno45 wrote:
| Do these come from residential solar leases? does this count as
| commercial?
| yepnopemaybe wrote:
| These will be commercial and utility scale solar facilities. We
| may get into residential in the future!
| foobiekr wrote:
| Show your work. Justify your ROI estimate.
| yepnopemaybe wrote:
| It will depend on so many factors. Our current accredited
| investors are getting about 10%+, but that's only because
| they have access to tax equity benefits.
|
| We are still in an early stage of creating the financial
| product, and the realized returns will be a function of the
| risk profile we choose (i.e. will there be construction
| risk, insurance, who is the power purchaser, etc.)
|
| Don't worry, you'll get a detailed financial profile/pro
| forma before you have to make a investment decision.
| foobiekr wrote:
| So let me get this straight. You are soliciting
| engagement and don't even have the financials worked out?
| tekno45 wrote:
| Will you be financing future farms, or does this only include
| existing farms?
| yepnopemaybe wrote:
| For the time being, we are working with either newly
| operational or existing solar farms. Once we have a
| community of investors, a lot of doors will open in terms
| of the kinds of financings we'll be able to accommodate.
|
| For the time being, we want to keep our investors our of
| construction risk and tell a super simple story through our
| design. More to come though.
| nonrandomstring wrote:
| It's a cool idea. I like it.
|
| A product I'd jump at is if you pay me back in electron
| volts end-to-end, wherever I am. Is that feasible? Say I
| live in an apartment block. I really want to go solar,
| but have no roof or land. I'll pay you to erect and
| manage 1kW of panels out on the farm for me and I get
| back, say 750W (you skim 25%). But I get it through my
| utility company (it just comes off my bill).
| yepnopemaybe wrote:
| I'd say that we are like Community Solar (what you
| described) but more portable. We combine aspects of stock
| equity with aspects of community solar. A different
| model, but one that can exist in symbiosis with
| Community.
| splitrocket wrote:
| The math here is pretty straightforward, however, it doesn't look
| like all of the components necessary to do the math are
| available.
|
| 1. How long do I "own a solar panel"? Indefinitely?
|
| 2. What is the wattage of the solar panel and where is it
| located? i.e. what wattage will it produce consistently YoY? What
| power market?
|
| 3. What percentage fees does Legends take?
|
| Frankly, #1 is the most important factor here by a long shot.
| maerF0x0 wrote:
| gonna pile on here so it's easy for OP to answer.
|
| 4. What contracts are in place to maintain the panel, and lease
| the space? What happens if the building decides to discontinue
| service. Will the solar panel be delivered to me (at what fee?)
| will the solar panel be re-placed on top of another building?
| (at what fee?)
|
| 5. are the devices insured against common forms of damage?
| (wind, hail, acts of humankind)
|
| 6. Can we implement at "DRIP" style reinvestment program where
| our ROI just funnels back into more?
| dpifke wrote:
| 7. Can I re-sell my "panels" (shares in the facility) at a
| later date if I want out?
| yepnopemaybe wrote:
| We hope to eventually operate a secondary market where you
| could do this. Depends on a few regulatory factors we are
| still considering. Definitely a priority.
| dpifke wrote:
| I'm curious the legal structure of what you're selling
| here. The terms and conditions on your website[0] seem
| generic, and don't describe the offering.
|
| You're promoting something you call "shares"[1], which
| promise to pay a dividend. Regardless of whether or not
| they can be resold, I assume your counsel has figured out
| a way that these aren't considered "marketable
| securities" within the meaning of the Securities Act of
| 1933, which would trigger all sorts of SEC scrutiny.
|
| I assume you're familiar with the early business model of
| Prosper Marketplace and their struggles[2] with the SEC
| over a similar issue.
|
| Does this fall under the Regulation Crowdfunding
| exception[3] or is there another loophole?
|
| (This is not meant as criticism; I'm genuinely curious.
| I'm not an expert, and the legal landscape has quite
| possibly changed since I last researched this issue.)
|
| [0] https://www.legends.solar/legal/terms-and-conditions
| [1] https://www.legends.solar/learn/actual-ownership [2]
| https://www.sec.gov/litigation/admin/2008/33-8984.pdf
| (PDF) [3] https://www.sec.gov/education/smallbusiness/exe
| mptofferings/...
| yepnopemaybe wrote:
| We are still structuring our first product - so it will
| depend, but we have options for all of these questions.
| From the securities side, we might consider Reg A+ or
| other crowdfunding regulation. I'd look into the
| structure Masterworks.io uses to learn more (I've in fact
| discussed this with their GC).
|
| We've been building our beta with accredited investors
| under Reg D.
| yepnopemaybe wrote:
| These are all great questions - so far we've worked with
| accredited investors to place $100K+ solar facilities while
| we've built our product. They are basically beta testers
| while de get out design, software, payments integrations, etc
| going.
|
| We answered those questions for accredited, for everyday
| retail investors it will depend on the solar facility we
| select and the financial structuring design.
| _eht wrote:
| They even numbered them for you...
| anakaine wrote:
| 100k+ facilities is a bold claim. Do you mean panels?
|
| How many panels does the average facility have?
| yepnopemaybe wrote:
| Sorry, I meant $100K
| adenner wrote:
| Great questions, lacking in answers... would you care to
| share what you expect the answers to be? It is hard to get
| on board with the number of unanswered questions.
| kingcharles wrote:
| Tell me you don't want to answer the questions without
| telling me you don't want to answer the questions...
| guerrilla wrote:
| I really wanted to take you seriously but that's impossible
| if you won't answer any fo these simple questions. This is
| a real bad look that does not inspire confidence.
| vorpalhex wrote:
| (2) is critically important as well. A panel is going to do
| differently in Texas than Maine.
| MrGuts wrote:
| A company named "Legend Solar" had some heartburn in Utah, about
| 3-4 years ago. Cashflow problems, incomplete installations,
| customers left hanging, the usual story. Utah wanted to pull
| their business license. So is this "Legends Solar" a reboot? The
| name is spelled a little differently.
| colincooke wrote:
| Interesting product, I'm curious how the ongoing fees (operations
| and maintenace, etc.) are managed. Does the provider of the
| installation take a cut? Does Legends do the O&M?
| yepnopemaybe wrote:
| We are still structuring our first retail investment (though
| we've done a few with accredited investors). We pledge to be
| upfront about our fee/cost structure which is likely to be an
| upfront financing fee and a portion of payments.
| rr808 wrote:
| I'd love a good list of different commercial wind/power
| investments. So much green washing out there.
| LunaSea wrote:
| I wonder if it will be possible to sell your stake after having
| bought some solar panels?
|
| Also, will you be legally proprietary of said panels?
| PragmaticPulp wrote:
| Potentially interesting idea, but the founding team doesn't
| inspire a lot of confidence: https://www.legends.solar/v2-the-
| team
|
| One "product designer", one former art gallery manager, and one
| embedded engineer with a couple years of experience.
|
| Advisors include another "product designer", someone who
| describes themselves as a "storyteller film maker", and someone
| in the solar financing space. At least there's one person in here
| with semi-related solar financing experience.
|
| Of course, it's entirely possible for a scrappy team like this to
| execute on a startup if they can get all of the right pieces
| aligned. I do get skeptical when the founding team and advisors
| have more "designers" than doers, though. Seeing the founder have
| "summer design associate" as a title within the past few years
| doesn't really inspire confidence in a capital-intensive solar
| company.
|
| Would love to see them succeed! However, I would need to see some
| proof that they can execute before I'd even consider touching
| this. This is the kind of business where you lose any claim to
| your solar panels the second they go out of business, and many
| lenders are happy to prey on those scenarios.
| [deleted]
| yepnopemaybe wrote:
| Resident 'Summer Design Associate' here - (might be time to
| take that one off my LinkedIn).
|
| We've been placing 100K+ solar facilities with accredited
| investors for a few months now as we've gotten our private beta
| version off the ground. We've also been working with more
| experienced finance partners to structure future investments
| available on Legends Solar.
|
| My wonderful cofounder hails from the art world, and has been
| helping to place our accredited product. She will be key in
| helping Legends create a resonant brand with cultural currency
| as we grow and evolve.
|
| Before we raise seed or launch our retail product, we will
| bring some project finance experience in-house. Recruiting has
| been easy because people outside of climate love our brand and
| mission, and people inside of solar finance are often finance
| professionals who rarely have an outlet to share what they do
| for the world and the industry publicly. (You should see us as
| solar finance conferences, we're the bell of the ball - not
| kidding, we found many of our finance partners there).
|
| I wanna push back on the idea that designers are no 'doers'...
| 'Doing' is an ethic, not a discipline, and there are plenty of
| examples of designers rising to be successful entrepreneurs
| (AirBnB, et al.).
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