[HN Gopher] Legends Solar - Buy operating solar panels on commer... ___________________________________________________________________ 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.). ___________________________________________________________________ (page generated 2022-05-31 23:00 UTC)