A few weeks ago, GTM Research released a new report finding that residential solar leases will peak in 2014. According to the report, the expanding availability of solar loan programs and alternate financing mechanisms will drive the trend line back to direct ownership in 2015. This is obviously great for homeowners who’d rather own their property than pay a third-party lessor. But the availability of solar loan programs isn’t just an opportunity for homeowners — it also represents an opportunity for lenders and investors who want to be part of the growing residential solar market.
Mosaic is one such company. In 2011, when it began, Mosaic was the first to crowdsource investments to fund solar projects in America. Now it has become the first company to offer homeowners a solar loan packaged with residential operations and maintenance services.
At Intersolar North America in San Francisco on Tuesday, the company announced plans to join forces with Enphase Energy Inc., a global leader in solar energy systems, to make financing and servicing easier for the the growing direct-ownership market. The Mosaic Home Solar Loan, leveraging Enphases’s technology, provides homeowners with hassle-free ownership of a solar PV system. Basically, recipients of the loan pay zero dollars up front, lower their energy costs, and receive servicing and monitoring through Enphase’s interface.
“For us we see it as a win for homeowners, for solar investors, and for solar installers,” Billy Parish, Founder and Chairman of Mosaic, told the audience at the Intersolar event. “Homeowners get an option to go solar for no money down, save money on their system from day one, and own that system with the peace of mind that as they’re making their loan payments, they’re building equity in that system and if things go wrong, they’re buying service for it. For solar installers they have a new, unique value proposition that they can offer to customers. And for investors this is a powerful new risk mitigant for them to enhance payment for performance.”
The bundled Home Solar Loan and O&M program really lowers the risk associated with direct ownership of solar systems. According to Katie Ullman, Mosaic’s Communications Manager, with Mosaic’s loan, monthly loan payments will be lower than what the homeowner is earning in energy savings, so loan recipients will actually be cash-flow positive with this agreement. “And beyond that, now they have a 95 percent up-time guarantee on the system,” said Ullman. “There should not be a reason that a homeowner’s panels are not producing electricity.”
Mosaic is currently looking for installer partners to incorporate the loan into their financing options. With leases ruling the financing regime, installers are not used to recommending loan options to homeowners. But this is bound to change as more loan products become available and the cost of systems drop. And with Mosaic’s bundled loan program, the company hopes that installers will be quick to recommend it to the growing homeowner market.
“The residential solar market increased 50 percent last year,” said Ullman. “So this is a way for Mosaic to expand the borrower side of our platform and, therefore, provide more investments to the investment side of our platform. It’s really just bringing in a new home solar product to the part of the industry that’s growing the quickest.”
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