By April 27, 2016 Read More →

Mosaic raises $200 million for U.S. home solar loans

Mosaic funds will support at least 5,000 rooftop installations


Mosaic allows homeowners to borrow money to install the rooftop system.  Owners can then claim generous federal tax credits unavailable to those who lease a system.  

By Nichola Groom

April 27 (Reuters) – Solar Mosaic Inc, a former crowdfunding startup that reinvented itself as a provider of home solar loans, said on Wednesday it had secured $200 million in funding that will support at least 5,000 rooftop installations.

Germany’s DZ Bank and New York state’s NY Green Bank provided the warehouse financing to the Oakland, California-based company, which goes by Mosaic.

The announcement marks the largest funding to date for the company, which in the last two years has grown into the nation’s top loan provider for residential solar installations, Chief Executive Billy Parish said in an interview.

Loans are offered through some of the top U.S. solar installers, including Vivint Solar, SunPower Corp and NRG Energy Inc.

Mosaic’s average loan amount is $30,000, Parish said. The loans can be structured to be paid over 10, 15, 20 or 25 years, with interest rates between 2.49 per cent and 7.99 per cent.

Customers are saving 15 percent on their electricity bills, on average, he added.

Founded five years ago, Mosaic first grabbed headlines as a scrappy solar financing company that raised money from retail investors who put up as little as $25 to fund commercial solar projects.

By 2014, however, the company had shifted its focus to the fast-growing residential sector and raising funds from institutional investors.

Two years later, Mosaic said it aims to originate $1 billion in home solar loans in the next year.

The U.S. residential solar market has grown dramatically over the last decade thanks mainly to financing schemes like leases and power purchase agreements pioneered by SolarCity Corp and Sunrun Inc.

In the last three years, however, loans have grown in popularity. With a loan, a homeowner owns the rooftop solar system outright and can claim generous federal tax credits. With a lease or PPA, the system is owned by a third party, such as a bank, that claims the tax credit.

Mosaic has made strides in an area of the market in which SolarCity, the top U.S. solar installer, has stumbled. The company recently stopped offering the loan product it introduced in 2014 after it received criticism for its complex payment structure, which fluctuated depending on the amount of energy the system produced. It also had a lengthy 30-year term.

SolarCity could still emerge as a formidable competitor, however. A company spokesman, Jonathan Bass, said SolarCity’s next generation of loans would have multiple term options and a fixed payment schedule.

(Reporting by Nichola Groom in Los Angeles; Editing by Matthew Lewis)

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