The Securities and Exchange Commission's (SEC) recently proposed rules for crowdfunding had been eagerly anticipated ever since President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law in 2012, which "created an exemption under securities laws for crowdfunding," RenewableEnergyWorld.com reports. The funding model is gaining in popularity and involves financing projects by collecting small amounts of money from a large number of people as opposed to just a few major investors.

Although now under a 90-day comment period, the proposed rules as they stand have the potential to "help solve delays common in formal full-blown SEC registration and disclosure" procedures for small businesses and entrepreneurs. They could also make it easier for renewable energy companies to "raise start-up capital or additional capital because they can offer investors a return on investment."

The impact of crowdfunding will likely be less significant for wind projects since they generally feature single turbine costs that are "well over the dollar limit" for crowdfunding. The California-based company Mosaic, however, is leading the way and having notable success in crowdfunding solar energy projects. Individuals can invest as little as $25 toward financing loans for owners and developers of solar energy systems, CFO.com reports. Mosaic "generates revenue from interest on the loans, and investors pay an annual fee equal to one percent of their total investment." These investors get monthly principal-and-interest payments that are "also funded by the developers' loan repayments."

The model is gaining ground for various projects and fundraisers in Ohio, but investor crowdfunding cooled throughout the state somewhat when the Ohio Department of Commerce's Division of Securities garnered national media attention for opening an investigation into Social Mobile Local Lending (SoMoLend) and its CEO in August. Among other things, the organization is currently under investigation for allegedly "making fraudulent financial projections; false and misleading statements regarding current and past performance; and false and misleading statements about [the company's] relationships with banks and other institutions," Cincinnati Enquirer reports (See our Aug 21, 2013, DevelopOhio blog post for more information).