Kickstarter has become a popular means for ambitious, underfunded entrepreneurs to test their ideas in the open market.  Kickstarter raised more than $319 million for 18,109 projects in 2012 alone.  This success raises the question: what else can be done with this business model?

Banking on forthcoming legislation from the Jumpstart Our Business Startups Act (JOBS Act), Oakland-based Mosaic thinks it has the answer: renewable energy.  Launching its publicly facing platform last week, the company funded four projects submitted by third-party companies, at a value of more than $313,000, in less than 24 hours.  Mosaic’s minimum investment is $25. The promised payback terms range between 60 and 109 months.  Mosaic says the loans come with interest on investments in the 4% to 6% range, which is better than nearly any current bank rate.

This most recent development has brought funding for all of Mosaic’s solar projects to approximately $1.1 million.  Mosiac previously funded five beta projects, which carried no yield but proved the feasibility of the technology.

Investing in such projects does not promise any return and carries inherent risk since venture funding for companies using Mosaic is not insured by the FDIC, unlike bank accounts.  Mosaic says it select projects with minimal risk and currently has a 100% on-time payback rate.  If the experience of other crowdfunding companies like Kiva is an indication, Mosaic should have a lower default risk than the majority of mortgages.

Prior to the JOBS Act of 2012, investments in projects of this size were hard to come by, and regulations by the Securities Exchange Commission (SEC) still have not been finalized.  In general, though, these regulations will likely allow smaller investors to participate in such projects by altering or dropping the accreditation requirement.  Because of other SEC rules, Mosaic can currently operate in California and New York, but the JOBS Act may create a set of national rules and simplify crowdsource funding.

Mosaic is neither the first nor the only company using crowdsource funding for green and renewable energy projects.  SunFunder operates crowdsourced loans with an emphasis in solar installations in the developing world.   Firms like Greenfunder and Green Unite have broader goals than Mosaic but still operate under the green/crowdsource banner.  Even social-impact funding giant Ashoka has launched a beta version of a crowdsource funding platform, called Innovations for the Public, with a $10 minimum investment.  While Innovations for the Public does not focus entirely on renewable energy projects, it shares a business model with Kickstarter and Mosiac.

It’s too early to say whether the crowdsourcing model is the future for small renewable energy projects, but if Mosaic continues to be successful, expect to see other companies competing for the space.  More importantly, expect to see a boom in small solar and other clean energy projects.