A new twist in solar financing is coming to California.
Mosaic, an Oakland-based solar finance start-up, is partnering with established rooftop solar installer RGS Energy to provide zero-deposit loans to homeowners who want to buy a solar energy system.
The loans will be backed by small-investor capital from Mosaic’s online crowdsourcing platform, which already funnels money to moderate sized solar arrays on farms, grocery stores, military housing and schools from coast to coast.
If successful, the “Mosaic Home Solar Loan” could help shift the tide of solar customers flocking to rooftop solar leases and power purchase agreements with no or little money down.
Those tidy arrangements take care of maintenance while allowing customers to pay a monthly or per-kilowatt fee for cheap solar energy to offset pricier utility services. But one aspect is missing.
“Unlike a lease, a loan offers ownership,” Mosaic President and co-founder Billy Parish said in an email, responding to questions from the U-T. “Homeowners build equity in their home solar system over time. A large benefit comes after the loan is paid off, when homeowners continue to get free energy for up to 25 more years, rather than renewing a lease. An immediate benefit is that the solar system increases the value of one’s home.”
The new loan offerings, available before mid-year, will set themselves apart from those at credit unions and banks in part by incorporating the federal investment tax credit into loan payments from the first installment. The credit can offset 30 percent of costs.
Major solar financing companies, including Sungevity and San Diego-based OneRoof Energy, are offering loan options alongside solar leases, with some analysts observing a resurgence of loans.
The approximate interest rate on certain Mosaic loans are forecast at 8 percent. The loans will have 20-year terms, with early payoff options to increase savings.
Solar is becoming more affordable thanks to falling equipment costs and other efficiencies, but a typical installation still may cost $20,000 to $30,000 — comparable to new car or modest kitchen remodel.
It will fall to Mosaic’s partner, RGS Energy, to assess the solar potential of individual home rooftops and provide an estimate of savings.
The company has its own installation crews and also subcontracts, providing a standard 10-year warranty. It has installed more than 1,700 rooftop arrays in the San Diego region, with between 20 and 30 employees in the area, according to Mosaic.
RGS evaluates the home’s solar potential and provides an estimate of the savings that solar could provide and then does the installation. They provide a standard 10 year warranty. They have their own crews and occasionally subcontract.
With the Mosaic loan announcement, RGS shares closed up 9.5 percent from the previous day at $4.14.
Article source: http://www.utsandiego.com/news/2014/Mar/05/mosaic-solar-option/