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Frank: [00:00:00] Hello and welcome to this week's special bonus episode exclusively for the Lever's Paid subscribers. Today we'll be sharing producer Jared's interview with Will Wiseman and Alba Forns. Will and Alba are the co founders of the green energy investment app, Climatize. After attending the global climate strikes in Barcelona in 2019, Will and Alba decided to turn that collective energy into tangible impact.

That's when they came up with the idea for Climatize, a mobile app that allows users to invest in solar and green energy projects, many of which are focused in underserved communities.

On today's interview, Jared chats with Will and Alba about the genesis of their idea, how Climatize manages the risk and transparency for its users. And their new contract with the U. S. Department of Energy.

Thank you so much again for being a supporting subscriber and funding the [00:01:00] work that we do here at The Lever. Now, here is today's bonus episode.

Jared Maher: All right, I'm here with Will Weisman and Alba Forms, the co founders of Climatize. How are both of you doing today?

Will Wiseman: Doing great, Jared. Thanks for having us on.

Jared Maher: Alba, I kind of start with you because what I wanted to ask with all of the, all the crazy weather that's happening all over the globe this summer, record heat, floods, it seems like questions, about how's the weather. Where you're at, are very pertinent right now. So where are you at and how's the weather?

Alba Forns: I'm currently based in Barcelona, and it's extremely hot. You can't imagine. Like, today, I was, I went out of the street and I couldn't even breathe.

Jared Maher: And will. How about you? Where are you located?

Will Wiseman: I'm in Santa Cruz, California, a little hippie surf town just outside the Bay Area. So we're bracing for a heat wave this weekend, so it's coming in hot here as well.

Jared Maher: And I think with, all the weather issues [00:02:00] coming every summer, this does really force people to think really, really hard about climate, climate change, and before we get into how Climatize started, and the business model, why don't you go ahead and tell me a little bit about what is Climatize and, some of the recent projects that you've been able to get off the ground.

Will Wiseman: Climatize is a mobile app that enables you to make easy and transparent investments in clean energy projects, mainly solar projects and energy efficiency. So you can download the app on the App Store and start investing in renewable energy projects and earn a competitive return starting as little as 5. yeah.

And so we see climatize as a way to really. You know kind of cut out the middleman and enable you to put your money directly to building renewable energy projects.

Jared Maher: And a reference point that a lot of people would have for this type of business is crowdfunding or something like Kickstarter where whole number of people [00:03:00] can. Join in to be able to fund money for a particular project. And, uh, we can kind of go into how this is similar or different than the traditional crowdfunding model, but, Alba, maybe you can talk about the most recent project and, how much money was raised for it.

Alba Forns: So, our first project was actually a community solar project in Massachusetts that was supporting low income families. The project in total was raising half a million dollars, and we actually managed to close the campaign extremely quickly. So, we fully funded the project in 31 days. Again, this project matches exactly climate impact, social impact, um, which is what people were looking for and being able to, give low income families access to clean energy and lower Electricity bills is, is very exciting, very important.

And,

Jared Maher: And so now that climatize has this one. [00:04:00] Half a million dollar funded project under its belt. Let's step back a little bit and talk about, how you both ended up getting this idea and starting off on this project that then became climatized. So, uh, we'll uh, you first tell me a little bit about where you come from.

Will Wiseman: So I am a climate lifer. I have been in the space for close to a decade. And for those listening without video, you know, I'm only about 26. I got my start in the industry back in high school. I was putting solar panels on roofs to pay my way through college. And you know, that is really what got my foot in the door and ultimately went on to get a mechanical engineering degree. And during that period worked in large scale electrical project management for multimillion dollar electrical.

Uh, gigs and then as well doing some AI for renewable energy power forecasting. So combining weather data and power production data to enable power producers to bid into markets more efficiently. And, really at this point, I've built. 15 solar projects with my own two [00:05:00] hands. I've really been the engineer on the jobs and now through climatize, I've been the financier.

And so really with that kind of nuts and bolts, you know, from the roof up mindset, I really know these projects very intimately. And I think that that gives us a unique advantage to assessing, you know, what goes into sourcing good projects. And then all of a sudden I really started working together. Uh, we met during a double master's degree in renewable energy engineering, and together she and I published a joint thesis from the Royal Institute of Technology in Stockholm, Sweden together.

And so it's been a twisting journey really on the technical engineering side, and then, you know,

Jared Maher: so you, you have a, a background in working in renewables and building these types of projects. And it's certainly an interest in that it's Alba. Is that, did you come at it from a similar angle?

Alba Forns: Sure. So, I mean, I didn't install solar panels as, as the Will did. He's, he's the expert on that. but my background is also in engineering. I actually started because I honestly just love [00:06:00] challenges. Maybe that's why I decided to, to fight against the climate crisis, because that's definitely a huge, a huge challenge to, to tackle.

I was working actually as an energy consultant, so I was doing a lot of renewable energy work, energy efficiency. But a ton of policy work as well. I was actually one of the people who pushed through one of the most important climate policies in Barcelona, Europe, where I'm based. And obviously I'm pretty proud about that one since it's, it's my city, my hometown.

And after that, I decided to do the same masters as well, as he mentioned, that's how we connected and how we, how we started climatize. And.

Jared Maher: And so with renewable energy technology, there's the mechanics of it. There's the building of it. really where you both have settled on is this is really about the financing and funding of these projects. So why did you identify as that being the important thing you all could do?

Cause you could have also started a business that was just building physical actual products [00:07:00] for renewable energy. Why get into the financing of it?

Will Wiseman: Yeah, it's funny because actually, uh, you know, the reason I went into the renewable energy side originally was that I didn't want to fight in the court of public opinion. If people didn't believe in climate change, I didn't want to have to convince you. To make that impact. You know, I wanted to provide clean energy behind the switch so that regardless of what you believed, if you turned on the switch and it was clean power, So it's funny that like, you know, we ended up starting a consumer business on the other side. Really the kind of aha moment was all the, and I we joined the global climate strikes in Barcelona back in 2019, and this was pre pandemic. There was a hundred. Thousand people in the streets protesting for climate action.

And I have this very vivid memory of standing on a bench and looking out over this sea of people. And there was this incredible hope and motivation, and there was people from all walks of life. And yet it struck me in this kind of sad realization that [00:08:00] we were all going to go home and nothing was going to be different.

And if you can get a hundred thousand people together and their best option is to make a cardboard sign. That is a glaring problem And so it was through that kind of aha moment that we realized that you know There was this real demand that had no means to actually drive tangible carbon reduction and you know, barcelona was just One of hundreds of cities.

And there were over 7. 6 million people who showed up to those strikes around the world. And we realized that, you know, those people who are actually in the streets protesting represent just the tip of the iceberg in terms of total demand that for every person who is in the streets, there were many more that, couldn't leave their Children or couldn't leave work or just simply couldn't make it happen.

And so, you know, that yeah. Group that was in the streets represents an enormous kind of behind the scenes group that really feels like this is an urgent problem But feels powerless

Jared Maher: also that just [00:09:00] the sheer dismay among people with the climate crisis, knowing that this is such an existential emergency, seeing it year after year, and then not feeling you can really do anything about it or actually affect it. In any way, it's the weather, it's these big problems that have to be figured out by governments or NGOs, and you can protest, you can try to elect people, but at the end of the day, it was this kind of untapped demand or something, providing something for people to direct that energy.

Is that all the, one of the origins of why you decided to settle on this type of investing?

Alba Forns: Definitely, as a person who feels climate anxiety I just feel Yeah, again, I mean, I'm one of the people who feels like this, you know, like fighting climate change is hard, and it all requires a huge degree of sacrifice, and this is an opportunity to take climate action, to do something that's, that's good for the planet, and, and to feel [00:10:00] fulfilled, at least a little bit, and know that your, your energy is It's actually converting into, into something.

Jared Maher: And so, Tell me the next steps that you then took that, made you settle on something that was more in what we call the, uh, or is now called the financial technology industry or these types of...

Crowdfunding investments,

Will Wiseman: Yeah, so, I mean, given my experience in the renewable energy engineering side, I had seen that capital had really been a bottleneck for us to be able to move faster. Frankly, we have the technologies that we need today. It's about getting the capital to them

Jared Maher: meaning that you would have projects that would be ready to go, that there's a demand. There's a place for it. It was just hard to raise money from investors

Will Wiseman: Yeah, to capitalize projects was the key kind of bottleneck and all of the firms could have hired more and moved faster had it not been for, you know, uh, you know, just throttled capital. And so, you know, if we were to, [00:11:00] 2x, 3x the amount of capital into the industry, it could have moved that much faster.

And so it was then that Alba and I really began exploring, you know, how is it that given this kind of common ability to contribute, Even a small sum of money, how is it that we enable the public to be active stakeholders rather than neutral bystanders in the energy transition? And one really interesting business model had been crowdfunding for renewable energy projects.

And this was something that was growing very rapidly in the EU, where you could raise up to 5 million euros for any given project. And we saw some of these platforms really blossoming. I mean, the leader in the Netherlands has funded almost 300 million euros of projects. You know, the leading platform in France was growing very rapidly before it was acquired by Societal General, their largest bank there.

And so we had seen this kind of rapidly developing market. And Alba and I had actually, you know, put together a team of of people [00:12:00] in Europe and were building our company there. And it wasn't until then we actually won grant funding by the New York State Energy Research and Development Authority. And through that grant did we realize that the Securities and Exchange Commission here in the US the S E C had changed the laws around crowdfunding.

And previously you could only fund a million dollars per project in the US and that's very challenging to actually do or make much meaningful impact in renewable

Jared Maher: like that. That was the floor for funding. You had to have a project where you had to raise. A minimum of a million dollars or up to a million dollars.

Will Wiseman: Up to a million dollars So you could only do 1 million and to be a many of these projects are larger than that They're, you know, 5 million 10 million utility scale projects or 100 million dollars or more out in the desert And so, it was really It was handicapping the industry here in the U. S.

And then in April of 2021, the Security and Exchange Commission [00:13:00] increased that ceiling to 5 million. And that made the U. S. and the E. U. regulatory frameworks equivalent. And so Alba and I reassessed the two markets and saw that, wow, you know, the U. S. could be a really meaningful market for us to take these best practices that we've been, Learning from and the EU and come and transplant them to the U S and be a first mover to help unlock and build this whole industry here so that, you know, we can open the doors for, from literally my grandma up through community banks and more to be investing into these projects side by side.

Jared Maher: And, in the U S there is a, large investment community around venture capital, right? Silicon Valley, investing in high risk startups, investing in solar and energy projects. ]

Where did you determine at that point that we are going to sort of target a particular kind of solar project? Because like you said, they can range from, half a billion dollar solar projects or energy projects [00:14:00] to something smaller. What was your thinking at that point?

Will Wiseman: So there's this really common misconception that, there's all of this new money that's being earmarked for climate investing by the big banks. And yet the reality is they're all fighting for projects that are over 100 million. I mean, the, the transaction cost in terms of time and physical cost is roughly the same for a hundred million dollar project as it is for a 10 million project.

And so these big banks are, they just don't get out of bed for anything less than a hundred million dollars. And so, you know, those utility scale solar projects are highly competitive, armies of lawyers and consultants and engineers, on them and those margins are really tight. But if you get down to the smaller projects, really below 10 million, those projects struggle to attract the project financing, the debt financing in particular, needed to really be able to realize them.

And so we found that by being able to use this, you know, crowdfunding. Up [00:15:00] to 5 million mark, we could actually serve a really underfunded sector of solar and that's where, you know, we can come in and in particular we're focusing on community solar, which is kind of small utility scale projects. So oftentimes located on, you know, those kinds of parking structures, or you can think sometimes commercial buildings, Brownfield sites, even sometimes Greenfield, but.

These projects are generally in the range of about 500, 000 to 10, 000, 000 full stack.

Jared Maher: And then they're called community solar. Is it because they're literally solar projects that are providing energy for the community around it?

Will Wiseman: Kind of, yeah. So community solar is a really exciting new sub vertical of, of the solar industry because what it does is it allows people to do they can subscribe to a solar project and why this is so important is actually that It expands access to solar like alba [00:16:00] mentioned before In particular to low income communities because if you don't own your home, you can't put And same thing, if you maybe don't have the money to be able to afford that system, then there can be that cost barrier for you accessing cheaper and clean energy.

In contrast with community solar, you can suddenly be a subscriber to a system. So it can suddenly, instead of having One power purchase agreement with a large off taker, say a meta or a Google, you could have a hundred families and four small businesses all pulling from the same system. And the big innovation here is this virtual billing reconciliation that utilities are beginning to implement where, you know, now they can fractionalize how those credits are put onto your bills so that, Again, you can have multiple families on these projects, and this is really important because now those families who are renting can subscribe to this project and appreciate 10 to 15% energy savings on their bill, while [00:17:00] not needing to have that system on their roof, and Now, the Department of Energy has been really leaning in to help support this new sub vertical because of really all of the climate justice impact that it has and how kind of it broadens access to clean energy, whereas in contrast, you know, you previously had to have a lot of capital to be able to either put that system on your roof or be so big that you could take all of the power from one of these systems.

Jared Maher: And so when I downloaded the climatize app this morning, and I went through the steps and it asked me some survey questions about what types of projects I'd be interested in possibly investing in, things like solar infrastructure, wind, bio energy, and 1 of the things I was wondering about is like, what role is climatize actually playing in this? Transaction. is it a broker for an investment? Is it And how, how do you find the actual projects to actually put on the, on the app for investments?

Will Wiseman: Sure. [00:18:00] Yeah, I'm going to do our lawyers a favor and just say, like, this is not investing advice. Do your homework. Everything comes with risk. But with this, uh, we Source projects in part through our network, through the New York State Energy Research and Development Authority, as well as, you know, we have signed a partnership with the Department of Energy through their national community solar partnership, where they are really leaning into creating scalable and replicable financing structures for these assets.

They have been helping feed qualified deal flow to us, as well as we've been doing our own business development with. Renewable energy developers to source those projects. Then we have a full due diligence process that was vetted and approved by the Department of Energy as a requirement for joining that partnership.

And so we check all of those projects with regards to. You know, credit worthiness of the, uh, you know, subscribers and the subscriber manager, we're going to want to look at, you know, the cash flows of these projects to make sure that they can sustain the kind of debt [00:19:00] that they're trying to take on. Uh, we want to make sure that they have all of their permits in place, that they have.

You know general liability insurance on it and that top to bottom all of their contracts are in place for it to really add up to a good project Then we as the funding portal are actually issuing securities So that's our big role is we vet the projects to make sure that all of their you know Documentation and everything is in place and then we help them create These debt notes, so they you're essentially buying kind of a fractional share of a loan in the form of what's called a promissory note, and that has a fixed interest rate on it.

And in the case of this first solar project, you have a senior secured first lien position on the project, which means you're the only creditor on that project. And the developer is essentially borrowing against the value of that project so that they can go and build new projects. And your investment is then backed by not only the contracted cash flows of that [00:20:00] solar project, but also the physical asset value.

So you have two forms of collateral on the project. With that, you're investing directly into, you know, these developers being able to build new projects while your investment is backed by the actual solar project itself.

Jared Maher: if I had, you know, 1, 000 and I wanted to put it into a particular project, what I'm actually doing is lending that money. In a way to that, to that project and what kind, how am I getting a return back? Is it just through interest or,

Will Wiseman: Yeah, so great question. So, uh, in contrast, this is a debt product. So you are receiving fixed interest payments every quarter, or at least that was as this first financial product was structured. So, uh, that first community solar array, it had an 8% annual interest, fixed interest, five year term, you are paid 2% quarterly.

And then the, uh, Renewable energy project developer is aiming [00:21:00] to refinance their project in, you know, year three or four To be able to get them down to a lower cost of capital which would ultimately give you liquidity and your money back So you would be getting interest payments every quarter and then principal back when they refinance

Jared Maher: And Alba, I wanted to bring you back in here. Give me a sense of like who, who these investors are that you've, brought in so far. What, what demographics are they coming from? Are they different than kind of your typical investment class of, of people who do this for a living?

Alba Forns: Sure. Um, well, as we mentioned at the beginning, we actually have people from all walks of life. Uh, his grandma is there. She already said that. but surprisingly, we've seen there's a, there's a lot of women who are interested in investing. And these kinds of projects, which is particularly exciting for me, we just, um, starting to started to see a lot of people signing up who were particularly that demographic generally a little bit over [00:22:00] 30, we're just looking for a transparent way to invest in things that are aligned with our values.

So I would say this is what we've seen recurrently, but again, you know, like there's, there's very different kinds of profiles, but I would say it's not necessarily a savvy investor.

Will Wiseman: I would say one to add to that also, it's been interesting because, you know, we have had people putting in as little as, 5 and people putting in upwards of 300, 000 and we've had foundations and organizations participating on these projects. And so it's really been kind of running the gambit.

And so that's been really exciting to see, you know, these kind of everyday people that are, you know, really wanting to put their money where their mouth is side by side, to your point. You know, some of these kind of more traditional investing groups.

Jared Maher: And are there projects? In the pipeline that, you anticipate will, make an appearance on climatize because as of right now, when I looked, I mean, it seemed like there was the one that was successfully funded, but, [00:23:00] there weren't any currently on the app right now.

Will Wiseman: Mm-hmm.

Alba Forns: yeah, we have two of them coming up soon. I'm, I'm so excited about these two projects. One of them is Solar for Shakespeare Theatre in New Jersey, and the other one is, Solar as well for a congregation, a congregation that have us also in New Jersey. The terms are very similar to the, to the project that was fully funded recently.

And, they are actually going to be coming up really soon.

Jared Maher: Yeah, that's very interesting. And you mentioned like a theater company wanting to. have solar panels, supplying energy to their theater, but just not having the, ability to take out a loan to do that. And so this, this seemed to be, a route that they were able to take to get their solar panels.

Alba Forns: Exactly. And also the, the advantage of this project, again, just by going solar, they are able To reduce their electricity bills, they were actually struggling with the electricity costs [00:24:00] and also access clean energy. So, if I remember correctly, during the first year, the project has already been built.

We're entering at a, at the bridge loan phase. And they managed to secure a 60% fill production just because they want solar. And definitely, obviously, this is, good for, for them to access clean energy as well. So, just seeing that we're, able to help. The theater, the congregation, just pay their, their bills and get a lower rate is, is also exciting.

Will Wiseman: And I'll add one piece here. You know, one thing from my experience way back when, you know, putting solar panels on roofs is that as I drive around my hometown, uh, and see the projects that I helped build and put on people's roofs, it still gives me an enormous amount of pride nearly a decade later. And that's something that we really want to help communities get that same feeling in terms of, you know, investing in a project nearby them and to be able to drive down to, you know, the synagogue or to the theater and be able to actually see [00:25:00] the impact of your money and see what it's creating is just fundamentally different than investing in, public equities where at best you're putting it towards, , the value of the company and you hope that it actually creates the impact that you want.

Jared Maher: Absolutely. Well, Will and Alba, we're going to leave it there right now, but I, uh, thank you for talking to us and I wish you all the luck with Climatize.

Will Wiseman: Thanks, Jared. It was a pleasure.

Alba Forns: Thank you, Jared. Thank you for having us.

Frank: That's it for today's show. Thank you again for being a paid subscriber to The Lever. I know you hear this a lot, but it is really true. We could not do this work without you. If you like this episode, and you'd like to help out a little more, you can pitch into our tip jar. The link for that is in the episode podcast player, or at levernews.

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The Lever Time Podcast is a production of The Lever and The Lever Podcast Network. It is usually hosted by David Sirota. Our producer is me, Frank Capello, with help from The Lever's lead producer, Jared Jacagmayor.