Loans 'major new focus' for Mosaic

Mosaic’s recent turn towards home solar loans represents a “major new focus” for the company, but it will maintain its original business of crowdsourcing finance for commercial rooftop projects, says president Billy Parish.

This spring Oakland, California-based Mosaic expanded its business to begin offering homeowners solar loans alongside downstream partner RGS Energy, looking to take advantage – and indeed lead – an expected trend away from the solar leases that have driven the US residential PV market in recent years.

On Tuesday Mosaic kicked things into a higher gear, announcing a loan product that will come packaged with O&M services provided by US micro-inverter maker Enphase, which already monitors more than 160,000 PV systems globally.

Mosaic’s ambitions for the loans side of its business are huge; it claims it will extend “at least” $100m worth of home solar loans by the end of 2015. By comparison, to date the company has funded less than $9m worth of PV projects – most of them commercial rooftop systems – through its core crowdfunding operations.

The $100m for loans will come from “crowdsourced funds, as well as institutional funds”, said Parish, speaking Tuesday at Intersolar North America.

While acknowledging that Mosaic – like many other companies – has run into challenges with scaling up its commercial-rooftop operations, he says the company is “continuing with that offering”.

“We’re talking with different partners about how to make commercial solar project financing more scalable,” he says.

But home solar loans is a “major new focus” for Mosaic, Parish says.

The third-party ownership model – done either through leases or power-purchase agreements – has been largely responsible for the explosion in residential PV in several US states in recent years.

But the model has started bumping up against several problems, leading analysts like GTM Research to conclude that its share of the market may soon begin to wane, as outright loans become more readily available.

One challenge for solar loans has been the O&M “gap” left when a customer buys a PV system outright – a gap Mosaic and Enphase’s new offering looks to plug.

Parish claims that Mosaic’s home loans offer the “lowest monthly payments of any [solar] financing product on the market in California”, with interest rates as low as 4.99%, no escalator, and no prepayment penalties.

The company is likely to face growing competition in the loans game, however.

Shayle Kann, GTM’s vice president for research, predicts that by the end of the year, every major solar third-party ownership company will expand to offer a loans package.