Solar Investing for Everyone
Will is the CEO & Co-Founder of Climatize, an easy & transparent mobile app enabling investments in renewable energy projects. Will has worked a range of jobs over his 9 years in the clean energy industry including managing multi-million-dollar projects, energy market analysis & even solar installation.
In 2023, Will was selected among the Forbes 30 Under 30 for Social Impact and in 2022 he was selected as a Young Global Changer by the World Policy Forum
Imperfect Show Notes
While these notes are not perfect (AI translation is still improving), they give you the gist of the conversation. Enjoy!
My conversation with Will Wiseman:
Morgan Bailey 0:02
Hello, and welcome to the profit meets impact Podcast where we explore the intersection of doing well and doing good in the world. I'm your host, Morgan Bailey. And I'm excited to bring you the wisdom of entrepreneurs and thought leaders that are using business to create sustainable and meaningful change across the globe. All right, I'm stoked to bring this conversation with will Wiseman will is the CEO and co founder of climatized, and easy and transparent mobile app, enabling investments in renewable energy products, Will is worked for a range of jobs over his past nine years in the clean energy sector, including managing multimillion dollar projects, doing energy market analysis, and even solar installation. In 2023, will was selected among the Forbes 30, under 30, for social impact in 2022, he was selected as a young global changer by the world Policy Forum. Well, it's really exciting to have you on the show.
Will Wiseman 0:57
Morgan, it's a pleasure to be here. Thanks for having me, looking forward to this. Awesome. Now, before we get into the fun, I know there's some some legal red tape or some some legal jargon we want to throw out there for our listeners. So I'll hand you over to you for that, sir. So just briefly here, gotta say as an investment firm. So you know, the information here is for informational purposes only, it shouldn't be considered a solicitation of an investment or any investment advice, the views are mine alone and not those of the firm, it's important to contact a qualified financial adviser and conduct your own research before making any investment decision. So remember, all investments involve risk, and the past performance doesn't indicate future results. So we got that done. Now, let's have a nice conversation.
Morgan Bailey 1:42
Okay, so what you're saying is, you're not going to teach me how to become rich,
fast, I was
Will Wiseman 1:47
working on it, you know, I think we can do it and save the planet at the same time. So I think that's gonna get to
Morgan Bailey 1:52
so I hope that's what we're having this conversation for awesome. So well, you obviously created a really interesting business around kind of enabling access to, to, you know, I don't want to the everyday person that like, the everyday person or everyday investor to, to both invest and make a difference, and climate. But before we get there, I'm really curious to hear how you navigated into this, building this business and the position you're in right now.
Will Wiseman 2:21
Yeah, so I have kind of a unique story. And that my childhood, my father was a marine biologist. And so that took us to the most far flung corners of the world to do his work. And so because of that, I got this real privilege to be around some of the most pristine coral reefs in the world, from a very young age. And so over the course of those travels, you know, I saw the rapid degradation of those ecosystems over my young life. And so by the time it was, you know, I was looking at kind of picking a career and understanding what I really wanted to zero in on for my future, you know, that kind of awareness and experience of seeing our ecosystems, you know, kind of collapsing in front of our eyes had been something that it struck me very vividly as a child. And so as I then chose, you know, to where I wanted to go, and ultimately study mechanical engineering, that was kind of what guided me into the climate and environmental space. And so funny enough, back in high school, I started putting solar panels on roofs to really be able to afford to go to college. And so that kind of brought two worlds together from Hey, you know, here's a concern or problem to actually now here is a solution. And you know, I can really be a part of it by helping, you know, family by family decarbonize. And so that was my first steps into the industry. From there, I actually worked at a seed stage AI for renewable energy power forecasting company based out of Barcelona. We're overlaying weather data and independent recording, power production data, and weather data to enable us to forecast up to two weeks out into the future, how much these assets, how much power these assets we're going to be generating. And then after that, I worked in large scale electrical project management, and just saw that with each one of those projects, it was going to be three, four years each. That wasn't really the pace that I wanted to operate at. And frankly, it wasn't the impact that I wanted to create over the length of my career. So went back got two graduate degrees, a master's degree in renewable energy engineering and in sustainable energy technologies. And through that double master's degree program is where I started working with my co founder. And she and I have now been working on climatized for about three years now. And really excited to be able to now hit the market start helping you know renewable energy projects raise capital so that they can accelerate their project deployment cycles and all around expand access to this asset class. So yeah, Excel To share more about our journey in the company,
Morgan Bailey 5:03
right on, so you just, you went through a lot there. And I'm curious, I'm curious to actually go back to the beginning a little bit sounds really want to really resonate with you. I went in originally to study marine biology, I came out of undergrad wanting to and going to work in alternative energy, and fuel cells, specifically. So. So I think it's fascinating. What I'm curious about is, so you share this experience of being this young kid traveling around the world with your father, that which sounds amazing, by the way, being able to see things that not a lot of people get to see, how did you draw that link between the coral reefs and then wanting to go into supporting technology as as opposed to becoming a marine biologist? Like, what was the connection there?
Will Wiseman 5:47
Yeah, definitely. It's a great question. So I think throughout my life, I have always been kind of a systems thinker. And so I've looked at, you know, kind of core problems that need to be addressed, as we, you know, kind of tie externalities together. And so I, through my father's work, had understood kind of the ecosystem of the coral reefs and understood the risks of ocean acidification, to their ability to form their exoskeletons, and to be able to create the the actual physical structures of the reefs. And so understanding the kind of chemistry behind that, and seeing that, okay, the carbon concentration in our atmosphere was ultimately increasing the pH of the ocean, and that was then potentially risking a much larger ecosystem collapse as potentially, the, you know, kind of crustaceans in the ocean would no longer be able to create the calcification process of their shells, that that could be kind of pulling out one key card in the stack of the House of Cards of that whole ecosystem. I mean, even at a young age, I was able to internalize that and realize that wow, you know, we may be on a trajectory towards a broad kind of systematic ecosystem collapse. And yet no one seems to be really looking at this in detail or, or really addressing this head on. And so as a child, I was quite sensitive to that and aware of it. And then it wasn't until actually, I stumbled across this kind of white paper that was covering this concept called artificial photosynthesis, which was the idea that you might be able to essentially have a solar panel. And instead of having a poly silicate that was doped with, you know, boron and phosphorous to create that electron movement. Instead, what if you could have kind of an algal layer or on a replicate the, the photosynthetic process, and instead of adding biomass, you could take 100% of that kind of sugar energy, and in the process, create both clean water and clean air. And to me, that was like the trifecta of potential. And that technology hasn't been realized. But it shifted me into thinking about how can we harness energy from the sun, which is an enormous energy source. And as I began to really understand kind of the central role that energy has in our broader society, you know, I really began to see wow, you know, we could use this resource that is readily abundant and available to everybody on the planet, to power our whole society and really mitigate many of these kinds of external environmental impacts. And yet, we just aren't, you know, what is it that's driving that what's preventing us from taking those changes. And so that really drove me into more of the technology side, because, you know, I had actually looked at, you know, doing maybe more of an environmental study, or environmental sciences degree, and ultimately opted to steer away from that, because I didn't want to write a report that didn't actually move the needle. You know, I wanted to make sure that every day, you know, the work that I personally was doing was decarbonizing the energy system, and just broadly the macro economy. And so from that, that's where I opted to go more of the engineering route, because I felt like, you know, it had a, you know, more tangible output, that I could see the line of sight to the impact of my
Morgan Bailey 9:33
work. Yeah, and I think thank you, for me sharing that. And I think that's, yeah, it makes sense. You know, how you, you know, from that early childhood experience, you know, and I appreciate the thoughtfulness that you had as a child and the observation of and carrying that through, into what it's manifested into today. And, and also, I think there's an there's an important piece and I was having conversation with professor recently who's focused on social impact. Asian will be in a later episode of this show. And one thing that he said is, you know, we've focused so much on defining the problems, and not nearly enough on defining solutions. And so I'm hearing a little bit of that, you know, it's just to, you know, to not just go and study more of like, the environmental challenges, the environmental issues as much say, Well, what are we going to do about this? So it sounds like you became very clear, and hey, you know, what technology technology is going to be the key to this, and specifically to you that around solar technologies. So obviously, there's a wide range, the world of solar technology has exploded over the past few decades, both both in access and affordability. So, you know, for you, you could have chosen to developing the technology, on selling the technology or scaling the technology. But tell us how you you landed on moving towards the financing aspect?
Will Wiseman 10:55
Yeah, you know, had you asked me, you know, in the beginning, would I be on the financing side, I would never have guessed. And it was not until really seeing that a, you know, building infrastructure is is very challenging, it's a, it's a long path. And so the kind of time from start to finish is a very long cycle. In contrast, you know, with finance, I could be engaged with more projects at a faster pace, and really come in at a very high leverage moment for that project's lifecycle, and enable it to come to life in a way that I wouldn't be able to as an individual contributor, as an engineer. And additionally, you know, within the renewable energy space, while during my master's, I worked with every technology type across wind, solar, hydrogen, you know, battery storage, nuclear, the whole gambit, you know, it's very difficult to be a master in every single one of them. And so I saw that while you know, I may never be able to master every single technology, despite how hard I try, it can still as a financier, you can work with the people who are masters of their skill set. And from there, you can enable those masters to go and do their work at a faster pace. And so I see the financing side as really enabling experts to go in and rapidly do their work at a greater scale. And so by having the fluency of a renewable energy engineer, sitting in more of a role of a capital allocator, I believe that provides a very meaningful bridge so that I can speak from an understanding of the other side of the table and really engage them on the problems that they have, and that have I've experienced as a project developer, as well. And so that, to me, is, frankly, a superpower because, you know, stepping into the world of finance, while it does have many nuances that, you know, shouldn't be understated. I think it's very challenging to go the other direction, you know, it'd be very hard for financier to step in and do the renewable energy project development work. While having been on the project developer side, I can understand risk mitigation based on my very hands on experience of actually working on and around those projects. And so it gives me a more kind of in the field understanding of actually the risks that I'm mitigating.
Morgan Bailey 13:26
Yeah, I mean, I think that's absolutely true. I mean, and having, having spent a lot of time as an engineer, myself, and in the various fields that I now work to support but don't work indirectly, I think having that experience is, is crucial. So I'm curious, I want to I want to get into the some of the business stuff first. But I'm also curious, because on what advice you would give to somebody, you know, who is looking for their first career, you were very intentional. I think there are a lot of people right now, who want to have a very meaningful career who want to contribute to to, you know, capping the the temperature rise of the Earth, or contributing to social or environmental causes. What advice would you have to anyone who's just, you know, just quickly if, you know, someone came to ask, you say, what do you think?
Will Wiseman 14:22
Yeah, I mean, for one, I would encourage them to go to climate based.org. They have a really great, I would say, kind of center point of many of the jobs in the industry. And I think one of the things that climate bass has done incredibly well is they've made it very, very visible to everybody that you know, climate change and in climate mitigation, is no longer simply a engineering and scientists field rather many of these rapidly, you know, scaling climate tech companies need folks in the back office doing you know, finance, operations and controls, they need those compliance teams, they need marketing team sails and bizdev, you know, there was a time in which it didn't feel like there was a role for those people. And now we need an all hands on deck approach to fighting climate change. And so as people are looking to take that step into climate action, I would really suggest that they go there first, because they're going to see that, wow, here are all these companies that you know, you can really get in on the ground floor. And not only, you know, these are some of the companies that are still raising money, even in this down phase of the economic cycle. And they're hiring like crazy. And so, you know, when I have friends that say, oh, yeah, I'm working at this, you know, b2b SaaS company, and I'm just running some workflow that, like, you know, drives me absolutely crazy, like, what do you do and, you know, take a step back, you can get a better paying job or decline that company, at worst, doing the same thing, but at least with impact, and at best, you can come in and find something that really inspires you, and fundamentally changes the way that you feel about the impact you create with your work. I mean, I think, especially as we look at the next generation, Gen Z, millennials that are, you know, now impact is very central to how they think about their work, you know, companies that are either creating net negative impact where, you know, neutral, are going to have a very hard time recruiting those generations of of skilled talent, you know, people are expecting that their work has some kind of embedded value. So, you know, going somewhere like that, trying out climatized, I think is a way to dip your toe into the pool and see, hey, you know, do I understand these technologies? How can I, you know, kind of take a crash course, on looking at the financial models of a solar project and kind of understanding, you know, the, the economic opportunity that lies in these projects, I mean, we kind of opened the doors to another wise industry that happened very much behind closed doors and open it to anybody to come in and begin understanding, you know, what does project finance for solar look like? And how can I get involved?
Morgan Bailey 17:02
Thanks for that, and remind, remind me, what is the name of that that website? You mentioned, climate, bass,
Will Wiseman 17:08
climate bass.org,
Morgan Bailey 17:10
climate based.org. Alright, we will keep that in the show notes. So, before we jump into climate ties, there's one more question I'm curious, which is when we when we look at the budgetary needs, like how much money do we need, like to be investing now to be investing in the future?
Will Wiseman 17:31
Sure, yeah. So I actually have a slide on that in my my pitch deck here. And I think I can briefly pull it up. But we need to be doing more like about four to a trillion dollars a year investment into Climate Technologies. And that's based on Bloomberg New Energy finances, recent studies and data that they've published. And we're way behind that. I mean, we have just recently crossed the kind of 1 trillion per year mark, globally, of dollars invested into climate infrastructure, we need to practically quadruple that immediate. And that's a staggering sum of money. And, you know, what I don't think a lot of people have necessarily wrap their heads around is what a tidal wave of infrastructure deployment we are foreseeing in the next decade. And this is largely driven by, you know, some of these new both, you know, national policies like the inflation Reduction Act, like the EU's green Recovery Act, you know, those big pieces of legislative incentives have, you know, an enormous kind of carrot approach to catalyzing new investment into the industry. And so, you know, there are numerous reports that are projecting that we're going to quadruple the amount of installed solar that has ever been installed by 2030. And that is just an enormous amount of infrastructure that people are just like, not necessarily coming to terms with because it's, frankly, a very hard conceptual scale of kind of deployment that I wouldn't say we've seen kind of since the post world war two era and reconstruction and the kind of New Deal politics that helped really accelerate the US in the early 50s. And so, you know, climatized really wants to position ourselves so that we are kind of the seat at the table for everyday people to come in and actually participate on this enormous economic opportunity. Because if the public is kind of left to the wayside, if they're stuck on the sidelines, you know, we're never going to actually build the coalitions and momentum necessary to hit these science based targets. We need to move much, much faster. And to be able to do that we have to be more you know, inclusive to the everyday person and share the benefits of the Enter do you transition with them? Otherwise, they're gonna feel left behind?
Morgan Bailey 20:04
Well, not only I feel left behind, but there's also a major source of funding that's going to be left down, unnecessary piece of funding. And I'm curious, you may not know this off the top of your head. But you know, how much of the funding where's the funding currently coming from? And how much does that need to change? Or how much can that change by kind of going to the general population to help fund some of these projects?
Will Wiseman 20:27
Yeah, definitely. So, you know, a lot of it has been through some early banks kind of beginning to dip their toe into the water, there are infrastructure funds that are specialized on renewable energy. You know, some of the folks like Bank of America and JP Morgan are very involved in the tax equity investing side of renewable energy finance. Now, you know, we just need to do three 4x, what's actually been happening? And the challenge has been that, you know, if, for example, fossil fuel returns outpace that of renewable energy infrastructure, there has been a lot of pushback in terms of, you know, reallocating that money, as we've seen through the anti ESG pushback recently. Now, that is a whole nother discussion. But what we need to see is that, you know, now with the incentives from the inflation Reduction Act, that that money is able to actually make it to the frontlines into actual project deployment. One of the challenges has been that, you know, there are these projects that are smaller than what the institutional players will finance given their transaction costs. So, you know, the large Wall Street banks are not really getting out of bed for anything less than $100 million, you have some community banks, or more regional banks kind of playing in that smaller tranche there. But we acclimatized, I've really seen that there's a very pronounced lack of debt financing, below $5 million. And so that's what we've really zeroed in on. And that fits very well with community solar in particular, and the regulatory framework that we operate under. So when you ask, you know, where is kind of the potential of, of capital from, you know, the broad populace, I'll take us back, actually, to the story of kind of what catalyzed climate ties. So my co founder, she and I joined the global climate strikes in Barcelona in 2019. And when we were there, you know, there was 100,000 people protesting in the streets. And we were blown away by this hope, and this motivation and this desire for action. And yet, you know, in this vivid moment, I remember standing on this bench and looking out over the sea of people, and just thinking, man, we're all going to go home, and nothing is going to be different. You know, how is it that we get 100,000 people together, and don't actually move the needle. And you know, if we can get 100,000 people together, and our best option is to make our cardboard sign. That's a glaring problem. And so myself and my co founder, she and I just did a back of the napkin calculation, like, What if everybody pitched in $1? You know, what would that mean? And so, you know, Barcelona 100,000 people, you'd have $100,000 That day, you'd have $36 million in a year, and we went, Okay, well, you could actually build, you know, some solar with that. If you then kind of scaled that to the broader movement that turned out that day, there were 7.6 million people who showed up to those strikes. I mean, that's over $2 billion per year, if they each just invested $1 per day. And that's a very idealistic way of kind of running that back of the napkin calculation. But we realized that, wow, this is actually a very meaningful sum of money. And the people who are actually in the streets protesting represent the tiniest little tip of the iceberg in terms of pent up demand for this industry and for this asset class. And so if there are 7.6 million people who feel like they need to skip their job, their school, whatever it be that day, to go out and actually make a scene, there are a lot of people that couldn't get out of work that day, that are still taking care of their children that need to be in school that couldn't be there, but we'd like to be there. And so we think that there is an enormous, untapped total addressable market underneath those 7.6 million people who showed up, and we want to empower them to be active investors in the energy transition.
Morgan Bailey 24:40
Amazing, and I really love and appreciate that story. And you know, I can I can sense that, you know, I can sense the the energy and you talked about Barcelona and, but also the disconnect, and I think a lot of us have seen that. And it's, you know, it's oftentimes hard to know exactly what to do. And so I think what I'm What I'm appreciating is not only did you kind of grapple with what that meant for yourself, but it sounds like you're also giving other people a tool to which they can be on go beyond simply, you know, riding on a cardboard sign, but they can actually invest their money, where their values are, where they want to see the energy transition go to.
Will Wiseman 25:21
Yes, I think it's incredibly important that we provide people with tools that are incredibly easy, and incredibly intuitive for taking climate action, because across over 250, interviews from those strikes, that kind of reoccurring thesis we were able to craft was that, you know, people feel like this is an urgent problem, but they feel powerless to actually make a difference. And when you ask many people, what is it that you're doing for climate action, their most common response is I recycle. And if you actually take a step back, those are two completely different problems. Recycling is the plastic problem and a pollution problem. Climate change is a carbon problem and a pollution problem like, they're they're totally different buckets. And yet, they're still I would say, lacking broad based education as to kind of the levers to be pulled to actually mitigate climate change. And so we really want to help kind of connect people to these opportunities, where they can go in and invest at their capacity, make it incredibly accessible and intuitive, and then actually do it in a way where they can earn a profit. And that's fundamentally different than the way that climate change is generally positioned to most people. Climate change, and kind of the broad narrative has been positioned is all about sacrifice, that people need to fly less that they need to, you know, cut meat out of their diet, they need to replace all of the appliances in their house. And each one of those is actually a very meaningful lever to be pulled at. And yet, for some, those lifestyle changes are too difficult. And, you know, we have to meet people where they are and not judge them based on this ideal kind of zero sum game of climate action. And so instead, if we can say, okay, climate change is not just about sacrifice, rather, here is the opportunity that you can actually come in and earn money off of, you know, decarbonizing the global economy, that's just fundamentally repositioning the way we think about climate. And I believe that's a really meaningful way to engage the public and bring them along so that they don't feel either, you know, relegated to the sidelines, or just broadly, that we're just pushing to the, to the side and not listening.
Morgan Bailey 27:44
Yeah, I think it's really important. And I want I want to call out something you said that, I think is, is an important paradigm shift, right. And when you talk about how climate change has been positioned, right, we talk a lot about risk, because it is at risk. And we talk a lot about danger. We rarely talk about the opportunity, right? And a lot of things we talk about, you know, it's punitive. Right. And so I think there's this shift of like, well, how can investing and doing the right thing actually yield returns? A lot of times, it's not that, you know, I think when we had a previous call, I mentioned that, you know, I got a statement from an investment, I was in a oil free investment. And in there, there's a disclaimer that said, we are not responsible for losses due to the fact that you're not, you know, you may you may lose out on money, because you're not invested in oil and gas. Right. So again, it's this punitive piece of like, if you run a go towards investing in climate change or fossil fuel funds, that there's greater risk. And I think the paradigm shift is, or what if there wasn't? What if there was greater reward? Long term, I think we're starting to get that we're starting to understand that. But I think it's so is really important for CRP. So I want to highlight two is that I really resonated with what you mentioned, which is the feeling of helplessness that people can have. And particularly when you when you look at the options that a lot of individuals feel they have, when it comes to reducing their footprint. You know, recycling is something people talk a lot about reducing transformation, or reducing their trans transportation or taking less flights or eating more of a plant based diet. When you actually look at the impact of those things. It's very marginal, compared to the actual the things that are going to reduce climate change broadly. And so I think what I what I'm hearing here, as well as saying, Okay, those things, those things are great, and we should absolutely do those things. So I'm not going to be enough to move the needle, actually. And so investing in some of these, investing in climate IT projects, as well as lobbying for policy and political change, and that respect is really critical. So pulling us back into into climatized a little bit and kind of like piecing it down for us like how it actually works. So what I'm hearing here is there's obviously a project, a project that's looking for funding. Right. So tell us a little bit about what is the, what is the landscape of those projects, what the size of this project, were durations of those projects? And then talk to us a little bit about what is it? You know, what does it mean to invest in those?
Will Wiseman 30:17
Sure, yeah. So now that you know, the project that we just finished fundraising for is closed, since no one can invest in it anymore. I don't think it's the solicitation. So I can kind of speak to that one in a little greater detail than I could about open projects. So with that, it was a community solar array that was based in Massachusetts, the power purchase off taker, the power purchase agreement was Arcadia. Now, that community solar project, just for those in the audience, who are maybe not as fluent in in the solar space, the big difference here is that with community solar, it's kind of the new sub vertical of solar, outside of utility, commercial, industrial, and residential. So now there's community solar. And the big difference here is that you have subscribers who are either individuals or businesses who are taking the power from that project. And now this project was exciting because it was directly benefiting a lower middle income community who was going to see 10 to 15% energy savings on their bill every month. And now with the incentives from the inflation Reduction Act, that project was also able to not only, you know, claim additional incentives, there was Massachusetts SMART program incentive, they gave it 27 cents per kilowatt hour generated, because it was benefiting those low to middle income communities. So with that project, the project developer was essentially issuing $505,000 worth of debt against that project. And that project developer is turning around and reinvesting that capital into developing new solar projects. This was essentially a bridge loan, senior secured first lien position on that solar project. And the way that this works, is that, you know, the developers, we've heard it time and time, again, that they really wanted this development capital, to be able to do much of the early lifecycle development of a project, which is the engineering studies, the Environmental Studies, the permitting, but that phase is very challenging to lend against, because, you know, it's, it can have major delays in the interconnection studies, it can have just a full failure of that development process, if it's just not a great project. So there's a lot of risk in that phase. And so we couldn't really get comfortable lending against that phase, despite the demand. And so what we said, is that, Okay, how about this, you actually put up your projects that are in your portfolio as collateral. And that then enables you to borrow against that project, and go and do that project development work, because now there's actually backing to this loan, in contrast to you know, you just wanted, it may have been expensive money, but you just wanted money. And if it, you know, went bust, that was a lenders problem. And we couldn't really do that we didn't feel that that risk reward was commensurate or safe to the investors that we host on our platform. And so because of that, we had to look to alternative ways to do it. So what the project developer is doing is they're borrowing against this project, redeploying it into developing new projects so that every dollar that you are investing into this project, you're actually buying a debt note, a debt security, that's backed by that solar project, and now your money is actually going and developing new projects in and around that community. And so with this, it was a 8%, fixed interest, loan 2%, paid quarterly, with a minimum investment of just $5. And we wanted to make that as accessible as possible, so that, you know, everyone from the $5 Investor through to the $100,000 Investor, could all get exposure to this asset class. And we really saw that we had investors all the way from $5, all the way up to $300,000. And, you know, with a median check being in the kind of $1,000 range. And so we're really excited to see kind of investors across the full spectrum, accredited foundations all the way through retail investors participating in coming to fund this solar project.
Morgan Bailey 34:38
Wow. It's such a you know, it's a really interesting model, right. And I'm the how you're managing the risk there is also really interesting because because you're right there are when it comes to developing projects, obviously, that initial phase, there's a lot of risk, they can completely shut down. And so the ability to in essence, you know, Um, leverage against that with existing with an existing project is as just pretty brilliant. Actually, that makes a lot of sense. Right. And, and so it's, you know, it is it is an investment, but really I mean, you are you're contributing to a loan. In essence, if you if I, if I'm hearing that correctly.
Will Wiseman 35:19
Yes. So it's the fractionalization of a loan. Yeah.
Morgan Bailey 35:23
And do these loans? I mean, what is the toll? Yeah, and I guess every loan is a little different, both in terms of percentage, but also in terms of the terms, but also in terms of the duration?
Will Wiseman 35:33
Yes. So this was an 8%, annual interest fixed interest term, five year term note.
Morgan Bailey 35:40
Okay, so that means that is that is that 8%? Over annually is at 8%, over the life of the project was at 8%. annually.
Will Wiseman 35:50
Yeah. So if you were to say, you know, put in $1,000, you'd earn $80? Or you could earn $80, every quarter,
Morgan Bailey 35:59
every quarter, or pardon me every year, every year, every year. Yeah. And then, and then that would obviously you wouldn't, you know, you would gain interest on that, you know, as years went on. Amazing. So, how, and then talk to us a little bit about how do you how do you find these projects? And what are you starting to see the market or the demand for these projects?
Will Wiseman 36:17
Yes, so we have been working with the Department of Energy through their national community solar partnership, and Department of Energy has a goal to increase community solar development by 700% by 2025. And why they are so bullish on seeing this industry grow rapidly, is because of kind of what I briefly mentioned that community solar predominantly benefits low to middle income communities. And the reason why that's the case is that previously, if you wanted to be able to essentially put a solar system on your roof, you had to own your house. And if you're a renter, that was not an option that was on the table. Now, all of a sudden, by being able to subscribe to a solar project, and essentially have that billing reconciliation between the frog the kilowatts generated by that solar system, and the kilowatt hours that you use in your house, all of a sudden, now you could subscribe to a project, that's two towns away, but still be getting the clean electrons credited to your bill that are cheaper. And so through that partnership with the DOA, because they're really leaning in on this, this kind of environmental justice initiative, we have been working with a consortium of other financiers as well as project developers to try and create a scalable and replicable financing process for community solar. And, you know, the Department of Energy has been outspoken that, you know, funding or pardon me, equitable access to financing is one of the most persistent barriers for community solar project development. And this is really, because of the scale and size of the projects, you know, they're generally, you know, below 10 megawatts, which is kind of in the range of anywhere from, you know, 16 to $20 million of full capital stack there. And so, you know, those projects, you know, even the ones a little bit smaller than that, unless they're aggregated into a portfolio that then is, you know, above 50 million or $100 million, the institutional investors are not able to get their big giant funds, all the way down to the actual front lines of these projects. And that's where we've identified a disconnect and want to be able to help bridge that gap. First, by opening the door to these accredited, you know, retail through qualified investors, and then in time be able to help these project developers also aggregate those portfolios and get them to the institutional players.
Morgan Bailey 38:58
So I mean, it sounds like this is one, I think the the fact that these are growing at such a rapid rate, I think it's going to be really interesting to see you know, how that starts to shape the energy landscape. And it sounds like for climatized, this means that there's going to be more and more partners. So when you when you look kind of over the next few years, how much do you see climatized growing,
Will Wiseman 39:22
my goal is to invest a billion dollars a year within the next five years. And it's a pretty lofty goal. But I think it's entirely doable, given the rapid growth in the market, as well as I think that we're really beginning to see the zeitgeist shifting towards you know, climate action becoming mainstream. And here's why. So, you know, three years ago, if you had told me that, you know, all of the car commercials in the Superbowl would be evey commercials, I would have thought you're crazy. And yet that rapid turnover, it happened just in front of our eyes, and yet, you know, now that's just the norm. And I think that we're getting very close to that becoming the kind of standard expectation of how finance works, and really how we look to actually take climate action. And so, you know, just, there are some companies that, you know, I can't necessarily say who yet, but they have landed deals with the big five banks here in the US to bring, you know, carbon footprint visibility to, you know, over 30 million Americans in the next year. And as that information then becomes more readily available to the everyday person, that becomes just baked into our psyche. And so, you know, as we are better educated on this topic, as it becomes normalized to everyday Americans, everyday people broadly, you know, that's when all of a sudden I see this tidal wave of, you know, kind of active investors beginning to participate in the energy transition. And so that's really the role that climatized wants to play is that, you know, once you've kind of begun your journey started your climate journey, we want to be that first stop, as you say, Hey, I have some money. And I want to know how I can align that with my values come to climatized. And we can provide, we think, you know, the most user friendly and intuitive experience for investing into this asset class.
Morgan Bailey 41:22
I'm curious, you know, a billion dollars a year, you know, if you're looking at, you know, average investment size of around $1,000. That's, that's a million. That's a million individuals across so it's like looking so over that to have a million, on average, maybe a million individuals investing? Does that, is that the scope that you think you can achieve over the over that timeframe?
Will Wiseman 41:48
Oh, yeah, definitely. And you know, why I say so is there's been numerous consumer investment products that have exceeded that, that bar, and far less time. And, you know, while there are, you know, kind of broad generalized finance products, my point is that, you know, just about everything is becoming climate. And I know that that sounds, you know, very much kind of all you guys are on a climate podcast, talking about climate stuff. But frankly, you know, as we look at, you know, fuel mileage standards going up, we see carbon credits being tied to, you know, flights. Now Google Maps shows you the most efficient way to be able to, you know, get from point A to point B, all of you know, our kind of day to day lives, is becoming increasingly transparent with our emissions profile. And there is going to be a point where, you know, the heat waves, the hurricanes, the, you know, just natural disasters around us finally, shake people awake to a point where you just cannot ignore it anymore. And I think the fires in California and the images from San Francisco, the fires in Canada, and the images from New York, these are these kind of big shake you awake moments that really move broad populaces and especially, you know, when people have their kind of first climate disaster that strikes them personally, that is a turning point in their lives. And, you know, that is becoming increasingly common in people's lives to have having experience something like that. And so, you know, the unfortunate reality is that as people kind of grow into that awareness, the customer base for a product, like climatized, grows very rapidly.
Morgan Bailey 43:33
Yeah, I can see it. And you know, I live in California, so I experienced those those fires. And I happen to fly to New York, just a few weeks ago, during that time as well. So it was, yeah, it kind of really brought it home. Now, one thing I'm curious to ask, you know, and is what what do you see as the greatest risk to your business model,
Will Wiseman 44:00
your greatest risk to my business model? You know, I would say the greatest risk is that, frankly, people don't come to terms with climate change, that they're too slow to move, that, you know, the gap that every startup has to cross in their early traction journey, that ultimately that is later than I expected, and that people don't come around to the kind of necessity for rapid action today. That's probably the biggest risk is that we as a populace don't actually mobilize at the pace that is required to not only address climate change, but you know, to keep the lights on in the business. And so, you know, I am convinced I have high conviction that we are approaching that point. And it's a little bit like you know, surfing, you have to be paddling to cash a wave, and if you don't, you're just gonna get tossed. And so, you know, we think that this is the right time in the right place for a product like this to come in. and broaden access to this asset class?
Morgan Bailey 45:04
Yeah, I mean, I think that that does make sense. And I think one thing is curious, as you're talking about that. I was wondering, I mean, how much? How much of your client base do you think is coming as a result of climate change? And how much is it simply for the returns? Because I mean it neatly at let's say that the one project, you mentioned, a percent return, you know, average market return is, you know, between six to 7%, so 8%, up there, currently, you can, you can put your money in a savings account and where the interest rates are right now, you can get over 4%, but that probably won't stay that way. So, you're actually offering a pretty, you know, obviously, there's some risk to it, of course, an investment, but you're off some pretty good incentive. So how much your client base do you think is going to come purely for the, you know, the value driven reason how much purely for the financial?
Will Wiseman 45:53
Yeah, so in our customer interviews, we've seen that about four out of five of the customers are more impact driven, they're really doing it because of the climate approach. You know, we found that often, new parents are particularly engaged with a product like this, it is a very pivotal moment in somebody's life, to begin suddenly thinking about their children's future and the impact that they're going to, you know, play on providing their children a better future. And then the kind of one out of five other investor is really looking at it just as an interesting investment opportunity, they're seeing it as, hey, you know, here are, here's an asset backed security with 20 years of contracted cash flows, that is mechanically complete, and is essentially generating its revenue stream from the sun, you know, and it's non correlated to the market. And then at the same time, you know, energy as a commodity, is something that we've never used less of. And so, you know, we've seen that those investors are taking this other approach of like, hey, you know, this is a great way for me to potentially, you know, kind of pump the returns on the kind of 40%, where I would carry, you know, a bond portfolio to diversify my risks, you know, this is a way for me to kind of pad that side of my 6040. And so, you know, we've seen both, and I think, you know, having those to be able to actually, you know, come together in this marketplace, and actually bring projects to life given, you know, frankly, separate incentives or not, it's not separate incentives, but rather separate motivations. You know, that is a sign of, I think, what a uniting force, you know, climate action can be for us broadly, I think we as a country are desperately in need of something that unites us behind a common cause. And you know, this can potentially be one of those things.
Morgan Bailey 47:47
Yeah. Let's, let's hope so. I unfortunately, have my skepticism on that. But I'm gonna remain hopeful. And so I could talk about we could go on for a while here. I do. You know, I think one last thing I want to share here is I am cute, I'd be curious to see if that you know that one out of five starts to grow. Because I mean, one thing that we saw from the cannabis industry is, once people got a hold of what the financial returns were, and started to see it as a financial investment, what their originally original thoughts were on pot completely shifted. I can speak from my own now I have a conservative family and the you know, to see how they flipped very quickly, when the financial investments became pretty aware of it. I'm just curious to see, you know how that will grow. But that that's, that's yet to be seen. Well, anything else you want to share with us or what you're excited about coming up next, before we we go to Wrap?
Will Wiseman 48:47
Yeah, so I mean, we're bringing on more investment opportunities to climatized. So I would encourage your listeners to go and download the app and give it a, you know, sign up, let us know what you think. Check out the opportunities. And, you know, please reach out to us. We appreciate the feedback that we hear from customers, and it helps us just continue to improve on the product. So, you know, let's get together and help reach that billion dollars a year mark and help build some climate solutions.
Morgan Bailey 49:17
Awesome. Well really appreciate it. I did download your app. So I am curious to to hit that invest button. So really appreciate the work you're doing excited to see where this goes. And appreciate this conversation today.
Will Wiseman 49:30
Thank you very much, Morgan. It's been a pleasure.
Morgan Bailey 49:32
Thanks for listening to another episode of the profit meets impact podcast. If you've enjoyed this experience, please subscribe wherever you find your podcasts and leave a positive review. You can also find out more about the podcast at www.profitmeetsimpact.com