Mosaic introduces solar loans

Solar crowdfunding pioneer Mosaic has introduced a solar loan product, for up to 20 years, for US residential PV customers. Mosaic believes the product will meet growing demand not met by solar lease providers.

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    Customers of Mosaic’s preferred installer network can now access an online solar loan portal and telesales service, by which they can apply for finance for a residential PV installation. Bundled with the loan product is a maintenance service, for the life of the loan.

    Mosaic was formerly known as Solar Mosaic and was the first company to introduce crowdfunded solar. It initially worked with NGOs and community groups in its local area, Oakland in the San Francisco Bay Area, to realize installations and since gaining wider SEC approval has rolled out a series of innovative crowdfunded products and installations. It has funded 20 commercial scale solar projects and reports a zero default rate from borrowers.

    Mosaic’s CIO Greg Rosen said that with its new solar loan, if a customer chooses the full 20-year product, repayments will remain low and they will be saving from day one.

    “Homeowners should save immediately and not drop a dime they wouldn't have spent on their utility bill without solar,” said Rosen. “Homeowners can also pre-pay their Mosaic home solar loan with no penalty.”

    Mosaic’s solar loan will vary in term and interest rate, which the company claims can be optimized to deliver the best outcome for the customer in terms of cash flow and savings on electricity bills.

    In a move that appears to be taking crowdsourced solar in a new direction, Mosaic will partly draw on its pool of investors to fund the loan program.

    “Mosaic's investors will provide crowdsourced capital, which will be combined with long-term institutional capital, to finance our low cost home solar loans,” said Rosen.

    Customer retains tax credit

    Another interesting development is that homeowners who decide on a loan instead of a solar lease, which has proven very popular in the US solar market, the Federal Investment Tax Credit (IVT) will go to the customer, rather than the lease provider.

    “Mosaic has created an innovative and very competitive solar financing tool,” said John Mason, Director of Technical Sales at PermaCity – one of Mosaic’s installation partners. “Their residential loan offers the advantages of ownership for payments comparable to those of a lease. And their online portal and loan application system is second to none.”

    For installers Mosaic has introduced an online tool to register with the company, and it says that its online portal and telesales will allow for easy access – presumably reducing customer acquisition costs.

    “Mosaic's home solar loan is the first home solar loan to be fully integrated into the solar sales process, which makes it easy for homeowner to get their solar installation planned and financed with one phone call. As of today, the Mosaic Home Solar Loan has the lowest monthly payments of any home solar loan on the market that we know of,” said Mosaic’s CIO Rosen.

    Mosaic anticipates that the growth of the solar leasing may decline next year, when the IVT for solar expires. Its solar loan also addresses the concern that leased solar installations may cause confusion if a property are sold and buyers are unwilling to take over the solar lease.

    “One of the reasons leases have been popular was the ability to monetize depreciation,” said Rosen. “The expiration of the "bonus" MACRS depreciation at the end of 2013 eroded this advantage. The market is also expected to lose large tax equity investors, who finance leases to take the tax credits, when the Federal Solar Investment Tax Credits decline at the end of 2016.”

    Rosen said Mosaic will roll out its solar loan, “with states that are known to be good for solar and in conversation with installers across the nation.”