Dividend Solar rolls out US solar loan
Dividend Solar is the newest PV financier to throw its hat into the US solar loan arena, announcing the nationwide roll-out of a residential solar loan platform – which will take on the sector's dominant solar lease and power-purchase agreement models.
Dividend Solar joins Mosaic and a growing list of solar financiers in arguing that the leasing model which has propelled companies like SolarCity to the forefront of the US residential solar sector has become outdated, with loans set to shift “the long-term value of solar back to the homeowner”.
Dividend calls its offering “solar-ownership-as-a-service”.
The company’s direct lending platform, called EmpowerPortal, aims to act as an intermediary between homeowners and local PV installers on the downstream end with institutional investors wanting exposure to the residential solar market.
With no installation workers of its own, Dividend will rely on local installation companies to come to it looking for loans for potential customers.
The loans that it extends to “creditworthy” homeowners for zero money down are held in a “bankruptcy-remote vehicle”, which Dividend offers investors an equivalent risk level to a securitized package of loans.
Analysts believe loans will quickly begin stealing market share from solar leases and PPAs, with many customers preferring to own their solar systems outright once the right financing packages are put on offer.
Dividend has not offered any specifics on where its funding will come from, but says it has attracted “the interest and financial backing of leading Wall Street principals and firms”.
The company has raised $1.5m in a seed funding round and another fund in the “eight-figures” from Wall Street investors, according to Greentech Media.
Addressing the so-called “service gap” that has given an edge to solar leasing, Dividend has partnered with Next Phase Solar, the California-based solar O&M specialist, to provide maintenance on its solar systems; and with New Jersey-based Locus Energy to provide customers with cutting-edge monitoring systems.
“The solar financing market is remarkably mispriced,” says Dividend Solar chief executive Steve Michella. “We’re looking to maximize the economic benefits for both homeowners and investors.”