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Published on May 19th, 2014 | by Zachary Shahan

17

Mosaic Launches Home Solar Loan Option With “Lowest Monthly Payments”

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May 19th, 2014 by Zachary Shahan
 

Originally published on Solar Love.

Mosaic (formerly “Solar Mosaic”) is well known in the solar industry for pioneering what one might call “crowd-investing.” It has allowed common Americans to invest in large solar power projects for less than $30… or much more if they prefer. That has been a big and exciting story within the solar industry over the past few years, but Mosaic’s latest news may be even bigger. It is now offering home solar loans that are the most competitive in the United States.

For some perspective: just the other day, I wrote about a potential shift away from solar leasing and solar PPAs toward cash purchases and solar loans. As the price of solar has come down and as more and more banks have found solar projects to be good and safe investments, the latter options have become more attractive. With Mosaic’s financial know-how, noble aims, and experience in the industry, the process might really hasten now.

Mosaic just created the infographic below for Solar Love and sister site CleanTechnica. It walks through the story above as well as a bit more. Before I send you down that fun read, let me share something Mosaic’s Katie Ullmann told me in an email this weekend while we were discussing these topics:

“Mosaic crafted this loan to have the lowest monthly payments of any home solar loan product that we know of on the market.”

From a simple (unscientific) analysis I conducted in February, I found that solar loans offered a better 20-year return on investment for 5 homes in 5 cities, but that solar leasing offered a better return for 5 other homes in 5 other cities. That surprised me (I expected the loans would do even better). Nonetheless, if that split is representative of the broader story, I’d expect to see a strong shift toward solar loans, especially given that most Americans would rather own their systems than simply lease them. If Mosaic is now offering a loan that beats all other solar loans on the market, well, I’m feeling a bit bad for the solar leasing companies that are going to have to deal with that.

Check out the infographic below on “The Shift” for more info, then chime in down in the comments with your own thoughts if you have any on this matter! I’ll likely follow up on this story in the coming week.

Solar Loan vs Solar Lease

I already leaned towards a preference for loans anyway, but that bullet-list at the end comparing benefits of solar loans to benefits of solar leases sure makes the loans look good, doesn’t it?

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About the Author

spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.



  • Ben

    Great graphic! …quick question/clarification – why is there a “full dot” under leases collecting the federal tax credit? That’s a benefit of ownership…not 3rd party financing.

  • tonenotvolume

    Why do they require an SSN prior to loan approval? There was some BS about terrorists but that requirement stopped me from completing the application. I’ll stick with a local, solar-friendly, secure bank or credit union.

  • JamesWimberley

    Ronald must be right that the resale value of a solar roof as a home improvement will converge on its (declining) replacement cost. But there’s a lot of uncertainty meanwhile. My advice to potential solar households is to do the sums first without guessing the improvement value. If the installation breaks even looking at your cost of capital and operating benefits, then go for it. Take the uncertain home improvement value as the jam in the sandwich.

  • Kyle Field

    Exciting to see this shift. I hope it can increase transparency to the consumers and ultimately drive down the cost of installed systems by parsing out the financing from the installation/sales costs of a system. In other news, our local REC Solar branch just put up their new Sun Run branding on their storefront. Quite a dynamic industry :)

  • Ronald Brakels

    According to the infographic solar panels increase a home’s resale value by an average of $17,000. In Australia we’d often have trouble fitting $17,000 worth of solar cells on the roof. Rooftop solar is a home improvement and does improve the value of a home, but one can’t expect the value to be increased by more than what a new system costs, and new sysems are rapidly coming down in price. In Australia, after tax and subsidy is removed, the average cost of installing a typical system per watt is about $2.12 US. I expect, or at least hope, that the use will soon get down to that level and then go below it as costs continue to drop.

    • Omega Centauri

      That would be the case if house prices were purely rational. But first impressions, curb appeal, and so on, indicate there is a large emotional component to the selling price. I wouldn’t be at all surprised if solar returned either 50% or 200% of its cost.

      • Ronald Brakels

        It is certainly not possible to know what value a particular buyer will place upon solar PV, and given that prices are rapidly falling people could definitely over estimate how much it is worth at current prices, but one would have to be optimistic to expect it to be valued higher than a new system.

        • Kyle Field

          The average consumer views solar as an overpriced luxury. Yes, that will gradually change but the perception of the population at large likely overinflates the perceived value panels add.

      • Patrick Lawson

        As a mortgage loan officer that specializes in Home Energy Improvement I can tell you that the average value added to the home is the right around the net system cost. More and more home appraisers are being trained on how to properly value solar and 200% of cost is nowhere near valuations that I’m seeing.

    • Dee Kay

      Prices here are significantly higher than in Australia and a 20 panel system can easily cost that much. I recently worked for a month in Australia in the solar industry (I work for a US-based inverter manufacturer but am originally from Australia) and was envious of the low retail prices in Australia.

      • Ronald Brakels

        Yeah, we’re lucky here compared to the US. But then we have to be, as our federal government is busy destroying the last vestiges of support for solar. They appear to have no ethical qualms about using rooftop solar to subsidise the rest of the grid.

        • Byron Meinerth

          I was in Oz a couple months ago and was really impressed by how many homes had PV panels. While many of the homes I saw installed a small amount, six, for example, rather than covering the whole roof, it was still impressive. It’s unfortunate that your government is now taking steps backward, especially when the momentum has already been built up.

    • http://zacharyshahan.com/ Zachary Shahan

      Oz is known to have many but small rooftop installations. I’d assume that’s the main factor. Don’t know how much larger the avg solar systems in the US are, but sure they are quite a bit larger.

      And thanks to Dee Kay for including some info regarding price differences, nice benefit from having a much more mature market and better incentive system.

      • Ronald Brakels

        According to Sunpower the average size of household solar PV in the US is 8.3 kilowatts. And that was over a year ago, so who knows, it may have gotten even bigger since then. The median size in Australia is probably still 1.5 kilowatts thanks to the way our subsidies used to work, but the average new install is now around 4 kilowatts. Without our GST tax or our Renewable Energy Target an 8.3 kilowatt system in Australia would have an average cost of about $2.00 a watt and a total cost of about $17,000.

        • Kyle Field

          This estimate is in line with my observation. Personally, I would rather have 6 panels (~1.5kw) on every roof than 8.3kw on one house in 50 .

        • spec9

          8.3KW? That has to include commercial buildings. I think the average residential system is more like 4.75KW.

          I have a 6KW system and it provides enough electricity for both my house and my electric car.

          • Ronald Brakels

            I’ve just found information from from Solar Energy Industries Associates (SEIA) that looks more reliable than what I used previously which gives the average US household installation size as now being almost exactly 6 kilowatts. That seems a bit more realistic to me as it’s only about 50% larger than the average new Australian install.

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