Credit: jonbgem / Creative Commons

As community solar arrays become more popular around the country, a Florida entrepreneur has created a company to apply a similar model to wind projects.

Daniel Lemberg created WindShare LLC to give small investors a chance to buy shares in community wind projects and receive a return competitive with other investments, such as annuities and Treasury bonds.

WindShare projects will allow subscribers to buy one or more $100 shares in community wind projects, with a likely annual return of around 3 percent, Lemberg said.

“We wanted to make it easy for the public to invest in a way that doesn’t require developers to adjust how they structure a project,” he said.  “We can bring the same innovation that’s in the solar industry into wind as well.”

Investors buy shares through 20-year contracts. They can buy or sell shares to other investors during that time. There is no penalty for early withdrawal and the principal will be returned, with interest, he said.

One of WindShare’s advisory board members is Tom Mahowald, director of business development at Navigant Research. While Lemberg, who has a background in health care, may not have fully understood the market when he started, he’s gained an expertise quickly, Mahowald said.

“It’s an incredibly creative way of putting things together and he’s (Lemberg) a bright bulb,” he said. “I’ve seen him put startups together before. If this weren’t Dan I wouldn’t put time into it. But I think this will be successful.”

Advantages to community financing

The WindShare approach has the added of advantage of reducing the “friction” in communities where wind installations are being constructed, Lemberg said.

A study in Canada revealed that if community members had an opportunity to invest they were much more agreeable to new projects, he noted.

“We’ll always give priority to local community members,” Lemberg said, with the first option to buy shares going to community members before a net is cast to attract the wider investment market, Lemberg said.

Small investors will be finding out about WindShare nationally through an aggressive digital marketing and public relations campaign.

For community wind projects there’s long been a struggle for financing. Local banks do not have the expertise to finance community wind, Mahowald said, and benefits tend to accrue to larger investors.

WindShare is looking for projects of at least $1 million because fees associated with smaller projects erases potential profits.

The clean energy platform Lemberg has chosen is a wind hybrid configuration developed by Juhl Energy, Inc. and although a location has not been chosen it likely will be Minnesota.

“I think it’s a great idea, we’ve always struggled with community projects to find adequate financing,” said Dan Juhl, founder and currently principal executive officer of his namesake company. “Most of the players in the financing game aren’t interested in community developments – they’re interested in making money.”

What Juhl likes about WindShare is its focus on community benefits in the development of wind energy. Ideally, the power generated will be sold to locally owned utilities.

“The value of WindShare is that if it turns into a stable financing source for community projects then the projects that we build will be in the best interests of the communities and create economic development … rather than just pure money deals,” Juhl said.

“We think we can leverage low-cost energy as an economic development tool for rural communities. In order to do that you have to have the financing that has the same mentality.”

Lemberg conceived his plan after several visits to the Caribbean, where he witnessed how residents used renewable energy to avoid expensive electricity bills.

Yet he found there wasn’t financing available for larger utility scale installations that could have served entire communities.

“There’s a lot of opportunity in America to deliver returns to local investors,” he said. “If it works here I’d love to take it back to the Caribbean.”

Frank is an independent journalist and consultant based in St. Paul and a longtime contributor to Midwest Energy News. His articles have appeared in more than 50 publications, including Minnesota Monthly, Wired, the Los Angeles Times, the Minneapolis Star Tribune, Minnesota Technology, Finance & Commerce and others. Frank has also been a Humphrey policy fellow at the University of Minnesota, a Fulbright journalism teacher in Pakistan and Albania, and a program director of the World Press Institute at Macalester College. Frank covers the state of Minnesota.