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Legends Solar – Buy operating solar panels on commercial solar farms

179 points by justicz 4y ago

hapiri 4y ago
Why not just sell the company's stock like the legacy way ? I suspect some legal loophole here.
tekno45 4y ago
Do these come from residential solar leases? does this count as commercial?
- yepnopemaybe 4y ago
  These will be commercial and utility scale solar facilities. We may get into residential in the future!
  - tekno45 4y ago
    Will you be financing future farms, or does this only include existing farms?
    - yepnopemaybe 4y ago
      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 4y ago
        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 4y ago
        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.
  - foobiekr 4y ago
    Show your work. Justify your ROI estimate.
    - yepnopemaybe 4y ago
      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 4y ago
        So let me get this straight. You are soliciting engagement and don’t even have the financials worked out?
        yepnopemaybe 4y ago
        I'd say we are 80% of the way there - every solar facility will have different traits and economics as an investment. We have the legal infrastructure and finance partners to make it happen pretty quick. As with any investment, we can't make claims about financials until everything is finalized and vetted. That will have to wait until we have a pro forma ready to go. Soliciting 'indications of interest' is a fairly common practice across all industries. To be clear, we are already financing larger $100K+ deals with friendly investors in our network as we design and engineer a product for a larger audience.
        esses 4y ago
        You are soliciting "indications of interest" with an estimated 7.3% yield with no justification whatsoever on the site to back it up.
        4y ago
colincooke 4y ago
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 4y ago
  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.
LunaSea 4y ago
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?
- yepnopemaybe 4y ago
  We hope to operate a secondary market, may introduce some other form of periodic liquidity. Ideally yes, you will own a real individual panel. But we may settle on a different structure if necessary from a regulatory or tax perspective (its a long story).
  - powera 4y ago
    There's owning the panel, but someone also has to own the inverter, the transmission equipment, the land (rent and/or property tax), etc. If it is structured as a share of a collective, it might be easier to take those expenses out.
spinaltap 4y ago
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.
- elil17 4y ago
  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 4y ago
  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 4y ago
  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.
- gisely 4y ago
  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.
- 4y ago
coda_ 4y ago
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 4y ago
  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).
splitrocket 4y ago
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 4y ago
  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 4y ago
    7. Can I re-sell my "panels" (shares in the facility) at a later date if I want out?
    - yepnopemaybe 4y ago
      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 4y ago
        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 https://www.legends.solar/legal/terms-and-conditions [1] https://www.legends.solar/learn/actual-ownership https://www.legends.solar/learn/actual-ownership [2] https://www.sec.gov/litigation/admin/2008/33-8984.pdf https://www.sec.gov/litigation/admin/2008/33-8984.pdf (PDF) [3] https://www.sec.gov/education/smallbusiness/exemptofferings/regcrowdfunding https://www.sec.gov/education/smallbusiness/exemptofferings/...
MrGuts 4y ago
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.
- fennecfoxen 4y ago
  A cursory inspection suggests an entirely different board. Heck of a name to pick, though.
ncmncm 4y ago
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 4y ago
  Why would you think that natural photosynthesis is worst then artificial one?
  - turtledove 4y ago
    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 4y ago
    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.
tims33 4y ago
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 4y ago
  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.
foobiekr 4y ago
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.
- arcticbull 4y ago
  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 4y ago
    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 4y ago
      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.
rr808 4y ago
I'd love a good list of different commercial wind/power investments. So much green washing out there.
- yepnopemaybe 4y ago
  It turns out its tough to get exposure to direct equity in renewable infrastructure, particularly as a retail investor. Do you mind if I put that in my business plan?
PragmaticPulp 4y ago
Potentially interesting idea, but the founding team doesn't inspire a lot of confidence: https://www.legends.solar/v2-the-team 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. The numbers on their example page also raise a huge red flag that they don't seem to understand the economics at all: https://www.legends.solar/get-early-access https://www.legends.solar/get-early-access $250 as an estimated investment for a panel they show as 350W is way below the installed cost that anyone is pulling off right now. I'm guessing they picked random numbers to collect interest to fundraise with, not from actual models. Honestly, I'd much rather see a corporation set up as a publicly-traded company that builds solar installations and pays out a dividend to investors. That keeps investors aligned with the company and maintains their claim over the installations. The way this is set up feels like it's designed to strip rights from individual retail investors by funneling their investment through the platform while someone else owns the company.
- deleted 4y ago
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- yepnopemaybe 4y ago
  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.).
sremani 4y ago
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.
- yepnopemaybe 4y ago
  Totally, I've often thought about how I could contrast Legends Solar with different ESG and impact products offered by large financial institutions with one hand, while they finance oil and financially destructive activities. To do that credibly, we'll have to be insanely transparent and good, which I plan to be.
RyEgswuCsn 4y ago
Is this... technically "securitization of the weather"?
- yepnopemaybe 4y ago
  lol, interesting way to think about it. I think about it as the opposite of securitization. We are designing a produce to have as few layers of abstraction, complexity, and bureaucracy as possible so that it feels like owning a real product, not like an investment.
dsr_ 4y ago
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 4y ago
  > 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?
  - yepnopemaybe 4y ago
    It would be pretty tough to get exposure to solar panel equity by any means - aside from providing a great experience, we actually will be pretty much the next closest thing to owning solar panels if you don't have a suburban home. We are different from investing in a utility for two reasons. First, you'll own simple direct ownership in a panel, not in an entire organization and all its bureaucracies and stakeholders. I want it to be as close to a consumer product as possible, to feel personal, not like an investment. Second, you panel will slowly depreciate over time and eventually be liquidated where a utility is hypothetically perpetual. Aside from that, utilities typically pay $.04 or so for power generated. We'll likely have a behind-the-meter arrangement with a commercial power purchaser (like a factory or hospital), which can boost the return but be somewhat more risky.
    - dsr_ 4y ago
      So... worse in every possible way, and you want an emotional connection to replace return on investment.
  - dsr_ 4y ago
    Nearly all public utilities are traded on the open markets. In the normal course of things, the minimum investment is either one dollar (if your broker supports fractional share trades) or one share (generally less than $200: there are few companies that like to follow Berkshire Hathaway's practice). None of them, to the best of my knowledge, are currently planning on being 100% solar. It's unlikely, although a 100% renewable company is pretty likely to either now exist or happen shortly. Hydro-Quebec is, courtesy Wikipedia: hydroelectricity (96.78%) wind (2.16%) biomass, biogas and waste (0.75%) nuclear (0.19%) thermal (0.12%)
phrz 4y ago
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
pmfgpmfg 4y ago
zekenie 4y ago
I think this is great. There are a lot of people who can’t do rooftop solar who’d like to, myself included. Hope they can make this work.
OmarIsmail 4y ago
I've been looking for something just like this! I find that people get really weird about solar stuff, so I'll explain why I've been looking for something like this. 1. I believe that man-made climate change is real and we should do something about it. 2. I want to limit/eliminate my own family's personal contribution to the warming of the planet for ethical and emotional reasons 3. I believe that solar is a "green" way to generate electricity, and at the limit if every house and building was covered in solar panels that would be a great world to live in 4. I want to help make that world a reality, and I'm not looking to maximize my ROI on the investment, it's not just about the money 5. I'd prefer much more solar energy production even if it's not the most efficient 6. I currently only have access to install solar panels on my own roof (which I'm already doing) 7. I think non-green energy production will only get more expensive, so solar energy is a decent diversified asset in a broader investment portfolio. I've actually gone pretty deep in thinking about how I could do this, i.e. get a bunch of investors together and install solar panels on business roofs like schools, warehouses, etc. I'm gonna request early access to this.
- swestwood 4y ago
  You should also check out Midday Tech: middaytech.com There isn't the investment/ROI angle – instead it focuses on putting up new solar by providing $1000-$5000 incentives to families considering rooftop solar. It focuses on lower income families and places that get most of their electricity from coal for maximum impact + additionality.
- yepnopemaybe 4y ago
  Hard agree with all of that. Thank you for the support!
- PragmaticPulp 4y ago
  All good motivations, but from an investment standpoint it seems everything about this would be better served by a publicly-traded company that owns and operates solar installations. They could pay dividends from the return on the installations. The way this is structured isn't great for retail investors. You're not really owning anything the way you would with a traditional investment. You're basically just giving them money and trusting that they'll continue to be in business long enough to pay it back. If they go bust, the panels and installations go to creditors and you get nothing. Great deal for their creditors, bad deal for you.
freemint 4y ago
Why would you buy one panel over 10 1/10th shares spread over multiple installations. The later seems much less risky
mym1990 4y ago
Viability and business model aside, can I just say I love the style and layout of the site? Its simple, but also a little bit quirky(in a good way) and approachable. Best of luck with this endeavor!
- yepnopemaybe 4y ago
  Aw, thanks! My background is in product design and I made it myself using WebFlow. Sadly, its one of the first things I've had to give up as other concerns within Legends have dominated my time. I still art direct it though, and design is gonna be essential to all our products.
powera 4y ago
What about batteries? One of the problems with mass solar panel deployment is that the sun only shines during the day, but people want electricity at night. Batteries are expensive, so initial deployments often rely on slack in the system. Once you are at a substantial part of the production in an area, that won't work.
- yepnopemaybe 4y ago
  Absolutely! That could be one of our next categories after solar. Depending on the facility, there could be on-site battery storage owned and operated by other non-Legends investors for the time being.
rossjudson 4y ago
I'm not interested in investing in solar power. But I wouldn't mind owning solar generating capacity that covers my family's energy needs; I don't think I need that routed to my own home. That's what the power grid is for. I've been thinking about this kind of "solar condo" or "solar co-op" for a while. City people use energy, and might want to know that their personal energy usage is positively covered by solar.
- seoaeu 4y ago
  Many power companies offer the option to pay a bit extra each month to be supplied 100% renewable energy
  - jbm 4y ago
    This is often not as impressive as it seems. I was paying extra for green energy from my local power utility (ENMAX) and it turns out, by green they meant they were burning biomass and using some form of carbon offset for it at the time I was paying. (https://www.enmax.com/home/electricity-and-natural-gas/easymax/green-your-energy https://www.enmax.com/home/electricity-and-natural-gas/easym...) That's greenwashing and I won't have any of it. I am getting panels put in this year; for some people that isn't an option.
- ajpgrealish 4y ago
  Ripple Energy (https://rippleenergy.com/ https://rippleenergy.com/) in the UK are offering exactly that, but with Wind Farms. You buy into a cooperative that builds and owns the wind farm. The generated energy is sold back to your utility and taken off you energy bill. It's very much like having local renewable generation, but can be used by those like me who live in an apartment and have no way to install solar.
- IshKebab 4y ago
  I mean that sounds a lot like investing in solar to me...
danans 4y ago
@yepnopemaybe Say I want to invest in solar to generate revenue to pay for charging my EV driven 15k miles a year, or about 3750kWh (@250Wh/mi). In my area, that will require about 2.6kW of PV, which at local rooftop PV rates of about $3/W would be $7800 pre Federal tax credit, or $5772 after the Federal tax credit. Meanwhile, 3750 kWh purchased from my utility will cost me about $1000/year at today's electricity rates. So the payback time for my hypothetical rooftop PV array is about 6 years, give or take, after which I get free miles. If I instead chose to invest in a group solar scheme like this, what is the upfront investment required to generate a guaranteed $1000/year. Extrapolating from the 7.3% rate of return on your website (the tool only allows 10 panels to be selected), it seems line that would require a $13698 investment. For my rooftop solar example, the rate is return is 17% annualized, and the investment is $5772. Other questions: After 25 years when the panels are performing at 85% capacity can I keep using them? Can I claim depreciation on the panels, since they are a purely depreciating investment (both in physical and in financial terms)? What if a worker accidentally damages my panel(s). Does your insurance pay for that or mine? My questions are sincere, not an attempt to shoot down the idea. I'd much prefer to own PV in a field somewhere instead of more attached to my house (I already have enough PV to provide for domestic electricity), and not much more roof space.
- powera 4y ago
  "3750 kWh purchased from my utility will cost me about $1000/year at today's electricity rates" - that's 26c per kWh. In most states, electricity is under 15c per kWh. If you need electricity in an area with high electricity prices, and you're getting a tax credit, and you're cutting out the middleman, it would be expected that a local system would have a better rate of return.
- deleted 4y ago
  [deleted]
- yepnopemaybe 4y ago
  Wow, those are all amazing questions. We are going to structure the investment so that your returns will be post tax-equity and post-depreciation. We would be opening up a can of worms if each retail investor's return were dependent on their particular tax situation (although we are now working with accredited investors who are availing themselves of MACERS and ITC). We could never guarantee any amount of generation since this is an equity investment, but to generate 1K worth of power on a facility that returned 7.25% would require about a 14K investment. Of course, if you really wanted to get technical, you would also incorporate the dirtiness of the grid you were selling to into your equation. I hope to one day build those types of tools, too. For sure, if you can build rooftop solar or use some sort of community solar arrangement, you should do that first before considering Legends Solar - it will likely have a strong financial benefit. But you can only offset as much as you consume using those tools, so if you still have an appetite or would like to offset your non-utility consumption, you might still consider us. For people who live in the city or who rent and don't have access to those tools, or people who like a good product and just want to understand what they actually own through their investment, you might consider us sooner. Sorry I can't answer with more detail - I really love quantifying and contextualizing the carbon you'll offset and financial returns you can earn in detail, but I'll need to break out my spreadsheets to really get into it.
Arbinv 4y ago
Utility scale solar projects with investment grade counter-parties (off-takers) produce an IRR of ~6% to ~7% over say a 30-year assumed life. This company is not delivering an 8% yield to investors putting up $1k for fractional ownership in a panel.
trixie_ 4y ago
Very interested in this. You may or may not know many stable coin investment platforms just went bust. There are a lot of people out there including myself holding legit USDC and GUSD that want to put their money somewhere to get a stable return. If we can help the environment at the same time it’s win win. Give us the ability to deposit the coin, pay ROI in mind and I’ll invest tomorrow. Even at 5% you’d get a ton of investment. As long as you’re transparent to your users, clear rules, and have a low barrier to entry this could be a winner. You could even do something crazy like tokenize the panels themselves and let people buy/sell rights to them on an open market. Be the first company that makes NFTs not a joke.
IncRnd 4y ago
Why didn't the company have the ability to get the cash from a bank in the first place? I imagine there is less stress created for a investor by purchasing panels for their own home or business and pocketing the savings, instead of giving the same money to a business that apparently wasn't able to secure the same loan from an investor.
- yepnopemaybe 4y ago
  Great question. Often new solar facilities come with tax benefits (ITC and MACERS depreciation) that the power consumer is unable to monetize - this is particularly true of non-profits and other businesses with very low tax bills. So they sell their solar facility to a private investor who is better able to exploit the tax benefits (i.e. people and orgs who have a lot of highly taxable income). Legends can come in either at the beginning of that life cycle by selling off the tax equity to private investors and the panels themselves and the revenue they generate (i.e. sponsor equity) to retail investors. We can also come in after the tax benefits have been exploited (5-7 years after commissioning) and purchase the solar facility from the tax motivated investor. In the future, we plan to bring project finance in house and do some origination work, as well. We are still at the start of our journey.
aunty_helen 4y ago
Cool product. I’m interested in buying a few panels worth. Best of luck and I hope you’re enjoying your 15 minutes of HN scrutiny ;)
basicplus2 4y ago
Smart.. out sourcing the risk.. and when the panels fail or are old and need replacing poof goes your investment.
halffaday 4y ago
I wasn’t under the impression that solar panels actually generate more revenue in their service life than their production and installation costs. Has this changed in the last few years?
- kumarvvr 4y ago
  Most Solar installations have Break even at about 7 - 10 years from date of operation. Useful life of panels, i.e, years required for their output to fall to 80% of full output is in the range of 20-25 years. After the break even period, most of the cash flow is profit.
stereoradonc 4y ago
I almost thought they have "LegendSolarCrypto" too. So far, mercifully, they don't.
nitsuaeekcm 4y ago
You can’t join unless you’re an accredited investor. That’s because, like for many other fun similar things, the enterprise passes the Howey Test and is considered a security under the Securities Act of 1933. It’s funny how they try to disclose-away the problem at the bottom, even though they’re obviously worried about it enough to block retail investors (if a security only sells to accredited investors, you can basically do whatever you want.) https://www.uclalawreview.org/here-comes-the-sun-how-securities-regulations-cast-a-shadow-on-the-growth-of-community-solar-in-the-united-states-2/ https://www.uclalawreview.org/here-comes-the-sun-how-securit...
- throwaway2037 4y ago
  This is an excellent point! I found the disclaimer at bottom of home page: No offers to sell or solicitations of an offer to buy securities or any other type of investment are being made or solicited by Legends Incorporated at this time. More details here: https://www.legends.solar/legal/legal https://www.legends.solar/legal/legal I am very familiar with the Howey Test. From time to time, HN try to "hack" the Howey Test with various mental gymnastics, but always fail. Real question: Could Legends Solar structure the investment like Cadence Real Estate? (Not a shill for them!) Cadence is basically mortgage-backed securities on multi-family properties for retail / mass affluent. They are operating for more than 10 years now. If their legal structure was not sound, I assume they would be enforced upon by SEC & friends. I feel "direct green energy investment" for retail / mass affluent investors has huge untapped potential -- like 10s of billions of USD, maybe 100s. It makes me so frustrated that I cannot push ahead solar and wind projects with my own money. I want to transition power supply as fast as possible. Oh yeah, please add utility-sized battery installations to that list also. When I look at solar potential in India (see "Bhadla Solar Park"), it boggles my mind. There is SO much potential. Same for Middle East, North Africa, and Australia. All could use/export the electricity or convert water to hydrogen, then use/export.
  - yepnopemaybe 4y ago
    The exact legal and financial structuring is still in progress. We will likely use a structure similar to that used by Reg A+ crowdfunding platforms like Masterworks.io. In fact, I've been in regular contact with their GC to validate this. There are other structures we could use, as well.
mattygh 4y ago
This looks similar to how mosaic[1] started in 2010, they since moved away from crowdfunding https://en.m.wikipedia.org/wiki/Mosaic_Inc https://en.m.wikipedia.org/wiki/Mosaic_Inc.
vander_elst 4y ago
> 7% (assuming yearly) returns seems a lot, is it sustainable even in the medium term (~3/5 years)? Sorry for being suspicious but it sounds like a Ponzi scheme.
jillesvangurp 4y ago
Sounds like a variation of a few companies in the UK/Europe where people jointly buy a wind mill and exploit it via some complicated constructions via their power bill. Great if it works and there are probably all sorts of benefits via subsidies and what not. The notion of tapping into unused space (commercial roof tops) is genius. Give companies enough of an incentive and they'll happily join. Especially since the capex is basically taken care off by others. The main challenges would be related to scaling operationally and sourcing the hardware. Smart but in the end it's just a way of owning shares with limited rights in a company. The share sales are used for capex. The capex drives the dividends (through power sold). Presumably that's a better deal than what private home owners would get. And of course the majority share holder gets their cut as well on top of service fees and what not. So, win win. Of course the question is what happens when things don't go so well (e.g. bankruptcy). In principle the same as with any other kind of investment probably. The devil is in the details. But this kind of cooperative model works very well in other sectors. E.g. milk producers commonly pool resources and some regional banks operate like cooperatives. So, it's not a strange idea. And this could be a great solution for people that would like to get some clean power but maybe don't have a place suitable for solar panels. Otherwise, it's a normal investment with risks and rewards. On paper, the notion of buy panels and sell power seems like it should be a straightforward one. But of course the devil is in the details with the terms and conditions. The sales pitch is great though and I could see how this would work well.
impostervt 4y ago
This reminds me a lot of those companies that sell Bitcoin mining shares (though obviously way more environment friendly). I guess it makes sense, but if the thing makes money...why do you need my money?
- fennecfoxen 4y ago
  Because interest rates are rising and you don't understand the concept of the discount rate.
deleted 4y ago
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RicoElectrico 4y ago
Is there any "buy equity in X" in similar form that did not turn out to be a scam or unprofitable? E.g. "cloud mining", "fractional share in high value collectible games" were all nonsense. After all, maybe the ruthless SEC is there for something - even if I don't agree with all that "accredited investor" gatekeeping that prevents competent individuals form getting a tiniest slice of the VC windfall.
jdlshore 4y ago
This product is targeted at people who want rooftop solar, presumably because of the environmental benefits, but don't have a good location for rooftop solar. If this is appealing to you, you might also want to check into your power company's offerings. It may be possible to buy carbon-neutral power directly for a relatively small fee. This is what I do, and it costs about $10-12 per month. (Buying "carbon-neutral power" means that the power company guarantees that the combined usage of everyone on such a plan is less than combined carbon-neutral power generation. It incentives power company investment in carbon-neutral sources.)

179 points by justicz 4y ago

hapiri 4y ago

Why not just sell the company's stock like the legacy way ? I suspect some legal loophole here.

tekno45 4y ago

Do these come from residential solar leases? does this count as commercial?

yepnopemaybe 4y ago
These will be commercial and utility scale solar facilities. We may get into residential in the future!
- tekno45 4y ago
  Will you be financing future farms, or does this only include existing farms?
  - yepnopemaybe 4y ago
    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 4y ago
      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 4y ago
        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.
- foobiekr 4y ago
  Show your work. Justify your ROI estimate.
  - yepnopemaybe 4y ago
    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 4y ago
      So let me get this straight. You are soliciting engagement and don’t even have the financials worked out?
      - yepnopemaybe 4y ago
        I'd say we are 80% of the way there - every solar facility will have different traits and economics as an investment. We have the legal infrastructure and finance partners to make it happen pretty quick. As with any investment, we can't make claims about financials until everything is finalized and vetted. That will have to wait until we have a pro forma ready to go. Soliciting 'indications of interest' is a fairly common practice across all industries. To be clear, we are already financing larger $100K+ deals with friendly investors in our network as we design and engineer a product for a larger audience.
        esses 4y ago
        You are soliciting "indications of interest" with an estimated 7.3% yield with no justification whatsoever on the site to back it up.
        4y ago

colincooke 4y ago

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 4y ago
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.

LunaSea 4y ago

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?

yepnopemaybe 4y ago
We hope to operate a secondary market, may introduce some other form of periodic liquidity. Ideally yes, you will own a real individual panel. But we may settle on a different structure if necessary from a regulatory or tax perspective (its a long story).
- powera 4y ago
  There's owning the panel, but someone also has to own the inverter, the transmission equipment, the land (rent and/or property tax), etc. If it is structured as a share of a collective, it might be easier to take those expenses out.

spinaltap 4y ago

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.

elil17 4y ago
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 4y ago
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 4y ago
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.
gisely 4y ago
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.
4y ago

coda_ 4y ago

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 4y ago
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).

splitrocket 4y ago

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 4y ago
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 4y ago
  7. Can I re-sell my "panels" (shares in the facility) at a later date if I want out?
  - yepnopemaybe 4y ago
    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 4y ago
      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 https://www.legends.solar/legal/terms-and-conditions [1] https://www.legends.solar/learn/actual-ownership https://www.legends.solar/learn/actual-ownership [2] https://www.sec.gov/litigation/admin/2008/33-8984.pdf https://www.sec.gov/litigation/admin/2008/33-8984.pdf (PDF) [3] https://www.sec.gov/education/smallbusiness/exemptofferings/regcrowdfunding https://www.sec.gov/education/smallbusiness/exemptofferings/...

MrGuts 4y ago

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.

fennecfoxen 4y ago
A cursory inspection suggests an entirely different board. Heck of a name to pick, though.

ncmncm 4y ago

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 4y ago
Why would you think that natural photosynthesis is worst then artificial one?
- turtledove 4y ago
  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 4y ago
  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.

tims33 4y ago

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 4y ago
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.

foobiekr 4y ago

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.

arcticbull 4y ago
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 4y ago
  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 4y ago
    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.

rr808 4y ago

I'd love a good list of different commercial wind/power investments. So much green washing out there.

yepnopemaybe 4y ago
It turns out its tough to get exposure to direct equity in renewable infrastructure, particularly as a retail investor. Do you mind if I put that in my business plan?

PragmaticPulp 4y ago

Potentially interesting idea, but the founding team doesn't inspire a lot of confidence: https://www.legends.solar/v2-the-team 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. The numbers on their example page also raise a huge red flag that they don't seem to understand the economics at all: https://www.legends.solar/get-early-access https://www.legends.solar/get-early-access $250 as an estimated investment for a panel they show as 350W is way below the installed cost that anyone is pulling off right now. I'm guessing they picked random numbers to collect interest to fundraise with, not from actual models. Honestly, I'd much rather see a corporation set up as a publicly-traded company that builds solar installations and pays out a dividend to investors. That keeps investors aligned with the company and maintains their claim over the installations. The way this is set up feels like it's designed to strip rights from individual retail investors by funneling their investment through the platform while someone else owns the company.

deleted 4y ago
[deleted]
yepnopemaybe 4y ago
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.).

sremani 4y ago

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.

yepnopemaybe 4y ago
Totally, I've often thought about how I could contrast Legends Solar with different ESG and impact products offered by large financial institutions with one hand, while they finance oil and financially destructive activities. To do that credibly, we'll have to be insanely transparent and good, which I plan to be.

RyEgswuCsn 4y ago

Is this... technically "securitization of the weather"?

yepnopemaybe 4y ago
lol, interesting way to think about it. I think about it as the opposite of securitization. We are designing a produce to have as few layers of abstraction, complexity, and bureaucracy as possible so that it feels like owning a real product, not like an investment.

dsr_ 4y ago

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 4y ago
> 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?
- yepnopemaybe 4y ago
  It would be pretty tough to get exposure to solar panel equity by any means - aside from providing a great experience, we actually will be pretty much the next closest thing to owning solar panels if you don't have a suburban home. We are different from investing in a utility for two reasons. First, you'll own simple direct ownership in a panel, not in an entire organization and all its bureaucracies and stakeholders. I want it to be as close to a consumer product as possible, to feel personal, not like an investment. Second, you panel will slowly depreciate over time and eventually be liquidated where a utility is hypothetically perpetual. Aside from that, utilities typically pay $.04 or so for power generated. We'll likely have a behind-the-meter arrangement with a commercial power purchaser (like a factory or hospital), which can boost the return but be somewhat more risky.
  - dsr_ 4y ago
    So... worse in every possible way, and you want an emotional connection to replace return on investment.
- dsr_ 4y ago
  Nearly all public utilities are traded on the open markets. In the normal course of things, the minimum investment is either one dollar (if your broker supports fractional share trades) or one share (generally less than $200: there are few companies that like to follow Berkshire Hathaway's practice). None of them, to the best of my knowledge, are currently planning on being 100% solar. It's unlikely, although a 100% renewable company is pretty likely to either now exist or happen shortly. Hydro-Quebec is, courtesy Wikipedia: hydroelectricity (96.78%) wind (2.16%) biomass, biogas and waste (0.75%) nuclear (0.19%) thermal (0.12%)

phrz 4y ago

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

pmfgpmfg 4y ago

zekenie 4y ago

I think this is great. There are a lot of people who can’t do rooftop solar who’d like to, myself included. Hope they can make this work.

OmarIsmail 4y ago

I've been looking for something just like this! I find that people get really weird about solar stuff, so I'll explain why I've been looking for something like this. 1. I believe that man-made climate change is real and we should do something about it. 2. I want to limit/eliminate my own family's personal contribution to the warming of the planet for ethical and emotional reasons 3. I believe that solar is a "green" way to generate electricity, and at the limit if every house and building was covered in solar panels that would be a great world to live in 4. I want to help make that world a reality, and I'm not looking to maximize my ROI on the investment, it's not just about the money 5. I'd prefer much more solar energy production even if it's not the most efficient 6. I currently only have access to install solar panels on my own roof (which I'm already doing) 7. I think non-green energy production will only get more expensive, so solar energy is a decent diversified asset in a broader investment portfolio. I've actually gone pretty deep in thinking about how I could do this, i.e. get a bunch of investors together and install solar panels on business roofs like schools, warehouses, etc. I'm gonna request early access to this.

swestwood 4y ago
You should also check out Midday Tech: middaytech.com There isn't the investment/ROI angle – instead it focuses on putting up new solar by providing $1000-$5000 incentives to families considering rooftop solar. It focuses on lower income families and places that get most of their electricity from coal for maximum impact + additionality.
yepnopemaybe 4y ago
Hard agree with all of that. Thank you for the support!
PragmaticPulp 4y ago
All good motivations, but from an investment standpoint it seems everything about this would be better served by a publicly-traded company that owns and operates solar installations. They could pay dividends from the return on the installations. The way this is structured isn't great for retail investors. You're not really owning anything the way you would with a traditional investment. You're basically just giving them money and trusting that they'll continue to be in business long enough to pay it back. If they go bust, the panels and installations go to creditors and you get nothing. Great deal for their creditors, bad deal for you.

freemint 4y ago

Why would you buy one panel over 10 1/10th shares spread over multiple installations. The later seems much less risky

mym1990 4y ago

Viability and business model aside, can I just say I love the style and layout of the site? Its simple, but also a little bit quirky(in a good way) and approachable. Best of luck with this endeavor!

yepnopemaybe 4y ago
Aw, thanks! My background is in product design and I made it myself using WebFlow. Sadly, its one of the first things I've had to give up as other concerns within Legends have dominated my time. I still art direct it though, and design is gonna be essential to all our products.

powera 4y ago

What about batteries? One of the problems with mass solar panel deployment is that the sun only shines during the day, but people want electricity at night. Batteries are expensive, so initial deployments often rely on slack in the system. Once you are at a substantial part of the production in an area, that won't work.

yepnopemaybe 4y ago
Absolutely! That could be one of our next categories after solar. Depending on the facility, there could be on-site battery storage owned and operated by other non-Legends investors for the time being.

rossjudson 4y ago

I'm not interested in investing in solar power. But I wouldn't mind owning solar generating capacity that covers my family's energy needs; I don't think I need that routed to my own home. That's what the power grid is for. I've been thinking about this kind of "solar condo" or "solar co-op" for a while. City people use energy, and might want to know that their personal energy usage is positively covered by solar.

seoaeu 4y ago
Many power companies offer the option to pay a bit extra each month to be supplied 100% renewable energy
- jbm 4y ago
  This is often not as impressive as it seems. I was paying extra for green energy from my local power utility (ENMAX) and it turns out, by green they meant they were burning biomass and using some form of carbon offset for it at the time I was paying. (https://www.enmax.com/home/electricity-and-natural-gas/easymax/green-your-energy https://www.enmax.com/home/electricity-and-natural-gas/easym...) That's greenwashing and I won't have any of it. I am getting panels put in this year; for some people that isn't an option.
ajpgrealish 4y ago
Ripple Energy (https://rippleenergy.com/ https://rippleenergy.com/) in the UK are offering exactly that, but with Wind Farms. You buy into a cooperative that builds and owns the wind farm. The generated energy is sold back to your utility and taken off you energy bill. It's very much like having local renewable generation, but can be used by those like me who live in an apartment and have no way to install solar.
IshKebab 4y ago
I mean that sounds a lot like investing in solar to me...

danans 4y ago

@yepnopemaybe Say I want to invest in solar to generate revenue to pay for charging my EV driven 15k miles a year, or about 3750kWh (@250Wh/mi). In my area, that will require about 2.6kW of PV, which at local rooftop PV rates of about $3/W would be $7800 pre Federal tax credit, or $5772 after the Federal tax credit. Meanwhile, 3750 kWh purchased from my utility will cost me about $1000/year at today's electricity rates. So the payback time for my hypothetical rooftop PV array is about 6 years, give or take, after which I get free miles. If I instead chose to invest in a group solar scheme like this, what is the upfront investment required to generate a guaranteed $1000/year. Extrapolating from the 7.3% rate of return on your website (the tool only allows 10 panels to be selected), it seems line that would require a $13698 investment. For my rooftop solar example, the rate is return is 17% annualized, and the investment is $5772. Other questions: After 25 years when the panels are performing at 85% capacity can I keep using them? Can I claim depreciation on the panels, since they are a purely depreciating investment (both in physical and in financial terms)? What if a worker accidentally damages my panel(s). Does your insurance pay for that or mine? My questions are sincere, not an attempt to shoot down the idea. I'd much prefer to own PV in a field somewhere instead of more attached to my house (I already have enough PV to provide for domestic electricity), and not much more roof space.

powera 4y ago
"3750 kWh purchased from my utility will cost me about $1000/year at today's electricity rates" - that's 26c per kWh. In most states, electricity is under 15c per kWh. If you need electricity in an area with high electricity prices, and you're getting a tax credit, and you're cutting out the middleman, it would be expected that a local system would have a better rate of return.
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yepnopemaybe 4y ago
Wow, those are all amazing questions. We are going to structure the investment so that your returns will be post tax-equity and post-depreciation. We would be opening up a can of worms if each retail investor's return were dependent on their particular tax situation (although we are now working with accredited investors who are availing themselves of MACERS and ITC). We could never guarantee any amount of generation since this is an equity investment, but to generate 1K worth of power on a facility that returned 7.25% would require about a 14K investment. Of course, if you really wanted to get technical, you would also incorporate the dirtiness of the grid you were selling to into your equation. I hope to one day build those types of tools, too. For sure, if you can build rooftop solar or use some sort of community solar arrangement, you should do that first before considering Legends Solar - it will likely have a strong financial benefit. But you can only offset as much as you consume using those tools, so if you still have an appetite or would like to offset your non-utility consumption, you might still consider us. For people who live in the city or who rent and don't have access to those tools, or people who like a good product and just want to understand what they actually own through their investment, you might consider us sooner. Sorry I can't answer with more detail - I really love quantifying and contextualizing the carbon you'll offset and financial returns you can earn in detail, but I'll need to break out my spreadsheets to really get into it.

Arbinv 4y ago

Utility scale solar projects with investment grade counter-parties (off-takers) produce an IRR of ~6% to ~7% over say a 30-year assumed life. This company is not delivering an 8% yield to investors putting up $1k for fractional ownership in a panel.

trixie_ 4y ago

Very interested in this. You may or may not know many stable coin investment platforms just went bust. There are a lot of people out there including myself holding legit USDC and GUSD that want to put their money somewhere to get a stable return. If we can help the environment at the same time it’s win win. Give us the ability to deposit the coin, pay ROI in mind and I’ll invest tomorrow. Even at 5% you’d get a ton of investment. As long as you’re transparent to your users, clear rules, and have a low barrier to entry this could be a winner. You could even do something crazy like tokenize the panels themselves and let people buy/sell rights to them on an open market. Be the first company that makes NFTs not a joke.

IncRnd 4y ago

Why didn't the company have the ability to get the cash from a bank in the first place? I imagine there is less stress created for a investor by purchasing panels for their own home or business and pocketing the savings, instead of giving the same money to a business that apparently wasn't able to secure the same loan from an investor.

yepnopemaybe 4y ago
Great question. Often new solar facilities come with tax benefits (ITC and MACERS depreciation) that the power consumer is unable to monetize - this is particularly true of non-profits and other businesses with very low tax bills. So they sell their solar facility to a private investor who is better able to exploit the tax benefits (i.e. people and orgs who have a lot of highly taxable income). Legends can come in either at the beginning of that life cycle by selling off the tax equity to private investors and the panels themselves and the revenue they generate (i.e. sponsor equity) to retail investors. We can also come in after the tax benefits have been exploited (5-7 years after commissioning) and purchase the solar facility from the tax motivated investor. In the future, we plan to bring project finance in house and do some origination work, as well. We are still at the start of our journey.

aunty_helen 4y ago

Cool product. I’m interested in buying a few panels worth. Best of luck and I hope you’re enjoying your 15 minutes of HN scrutiny ;)

basicplus2 4y ago

Smart.. out sourcing the risk.. and when the panels fail or are old and need replacing poof goes your investment.

halffaday 4y ago

I wasn’t under the impression that solar panels actually generate more revenue in their service life than their production and installation costs. Has this changed in the last few years?

kumarvvr 4y ago
Most Solar installations have Break even at about 7 - 10 years from date of operation. Useful life of panels, i.e, years required for their output to fall to 80% of full output is in the range of 20-25 years. After the break even period, most of the cash flow is profit.

stereoradonc 4y ago

I almost thought they have "LegendSolarCrypto" too. So far, mercifully, they don't.

nitsuaeekcm 4y ago

You can’t join unless you’re an accredited investor. That’s because, like for many other fun similar things, the enterprise passes the Howey Test and is considered a security under the Securities Act of 1933. It’s funny how they try to disclose-away the problem at the bottom, even though they’re obviously worried about it enough to block retail investors (if a security only sells to accredited investors, you can basically do whatever you want.) https://www.uclalawreview.org/here-comes-the-sun-how-securities-regulations-cast-a-shadow-on-the-growth-of-community-solar-in-the-united-states-2/ https://www.uclalawreview.org/here-comes-the-sun-how-securit...

throwaway2037 4y ago
This is an excellent point! I found the disclaimer at bottom of home page: No offers to sell or solicitations of an offer to buy securities or any other type of investment are being made or solicited by Legends Incorporated at this time. More details here: https://www.legends.solar/legal/legal https://www.legends.solar/legal/legal I am very familiar with the Howey Test. From time to time, HN try to "hack" the Howey Test with various mental gymnastics, but always fail. Real question: Could Legends Solar structure the investment like Cadence Real Estate? (Not a shill for them!) Cadence is basically mortgage-backed securities on multi-family properties for retail / mass affluent. They are operating for more than 10 years now. If their legal structure was not sound, I assume they would be enforced upon by SEC & friends. I feel "direct green energy investment" for retail / mass affluent investors has huge untapped potential -- like 10s of billions of USD, maybe 100s. It makes me so frustrated that I cannot push ahead solar and wind projects with my own money. I want to transition power supply as fast as possible. Oh yeah, please add utility-sized battery installations to that list also. When I look at solar potential in India (see "Bhadla Solar Park"), it boggles my mind. There is SO much potential. Same for Middle East, North Africa, and Australia. All could use/export the electricity or convert water to hydrogen, then use/export.
- yepnopemaybe 4y ago
  The exact legal and financial structuring is still in progress. We will likely use a structure similar to that used by Reg A+ crowdfunding platforms like Masterworks.io. In fact, I've been in regular contact with their GC to validate this. There are other structures we could use, as well.

mattygh 4y ago

This looks similar to how mosaic[1] started in 2010, they since moved away from crowdfunding https://en.m.wikipedia.org/wiki/Mosaic_Inc https://en.m.wikipedia.org/wiki/Mosaic_Inc.

vander_elst 4y ago

> 7% (assuming yearly) returns seems a lot, is it sustainable even in the medium term (~3/5 years)? Sorry for being suspicious but it sounds like a Ponzi scheme.

jillesvangurp 4y ago

Sounds like a variation of a few companies in the UK/Europe where people jointly buy a wind mill and exploit it via some complicated constructions via their power bill. Great if it works and there are probably all sorts of benefits via subsidies and what not. The notion of tapping into unused space (commercial roof tops) is genius. Give companies enough of an incentive and they'll happily join. Especially since the capex is basically taken care off by others. The main challenges would be related to scaling operationally and sourcing the hardware. Smart but in the end it's just a way of owning shares with limited rights in a company. The share sales are used for capex. The capex drives the dividends (through power sold). Presumably that's a better deal than what private home owners would get. And of course the majority share holder gets their cut as well on top of service fees and what not. So, win win. Of course the question is what happens when things don't go so well (e.g. bankruptcy). In principle the same as with any other kind of investment probably. The devil is in the details. But this kind of cooperative model works very well in other sectors. E.g. milk producers commonly pool resources and some regional banks operate like cooperatives. So, it's not a strange idea. And this could be a great solution for people that would like to get some clean power but maybe don't have a place suitable for solar panels. Otherwise, it's a normal investment with risks and rewards. On paper, the notion of buy panels and sell power seems like it should be a straightforward one. But of course the devil is in the details with the terms and conditions. The sales pitch is great though and I could see how this would work well.

impostervt 4y ago

This reminds me a lot of those companies that sell Bitcoin mining shares (though obviously way more environment friendly). I guess it makes sense, but if the thing makes money...why do you need my money?

fennecfoxen 4y ago
Because interest rates are rising and you don't understand the concept of the discount rate.

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RicoElectrico 4y ago

Is there any "buy equity in X" in similar form that did not turn out to be a scam or unprofitable? E.g. "cloud mining", "fractional share in high value collectible games" were all nonsense. After all, maybe the ruthless SEC is there for something - even if I don't agree with all that "accredited investor" gatekeeping that prevents competent individuals form getting a tiniest slice of the VC windfall.

jdlshore 4y ago

This product is targeted at people who want rooftop solar, presumably because of the environmental benefits, but don't have a good location for rooftop solar. If this is appealing to you, you might also want to check into your power company's offerings. It may be possible to buy carbon-neutral power directly for a relatively small fee. This is what I do, and it costs about $10-12 per month. (Buying "carbon-neutral power" means that the power company guarantees that the combined usage of everyone on such a plan is less than combined carbon-neutral power generation. It incentives power company investment in carbon-neutral sources.)