A New Way for Homeowners to Go Solar

What if you want to put solar on your roof but can’t spare the cash to buy it? What if you want the independence and financial benefits of owning your system rather than leasing it?

There’s a simple answer to these questions: solar loans.

Today, RGS Energy (NASDAQ: RGSE), a nationwide provider of turnkey solar energy solutions, and Mosaic, the first company to offer investments online in solar projects, announced that they have partnered to launch the Mosaic Home Solar Loan. The new loan program provides a simple and affordable way for American homeowners to finance ownership of their residential solar system.

This is exciting news. While they’re relative newcomers to the solar party, we think loans will get big.

Look at how solar leasing has taken off. In California and other states that allow it, leasing has enabled many more people to go solar and led to increased adoption among the middle-class.

But a lot of people like to own a large asset like a solar installation. And whether or not it’s actually an issue to transfer a solar lease when selling a house, that can be the perception.

Like a solar lease, the Mosaic Home Solar Loan comes with no upfront cost. But unlike a solar lease, it allows homeowners to own their system.

What makes the Mosaic loan special? There are a few others out there, but Mosaic is offering some extra attractions:

• The Mosaic Home Solar Loan is the first of its kind to be integrated seamlessly into the solar sales process. It also offers a simple online loan application can be completed in minutes. Other loans can be as cumbersome as a mortgage application and might even require a second lien on a house.

• The Mosaic program is the first to offer “Choice Payments,” integrating the solar tax credit into the payment process to ensure that monthly payments stay low from Day 1. In contrast, other solar loans come with higher monthly payments.

• The Mosaic loan is a true P2P platform that lets people profit from clean energy by either lending/investing or borrowing. It’s all part of the “sharing economy,” in which property owners capitalize their unused capacity of things they own and consumers buy or rent from peers rather than from a big company. In this case, Mosaic helps people make money on their rooftops via a solar loan, and helps those who can’t go solar profit from solar on someone else's roof.

• For Mosaic investors, this loan product will provide a much higher volume of projects to invest in, as well as access to residential solar assets.

Paying little or nothing up front, homeowners will experience all the benefits of home solar ownership, including lower electricity bills, tax credits, and -- unlike with a solar lease or power purchase agreement -- free energy after the end of the term.

By combining Mosaic’s innovative web software technology with RGS Energy’s excellent market reach and customer service, the partners aim to improve the solar buying experience and increase the number of homeowners going solar.

RGS Energy plans to offer the new loan product to California homeowners starting in the first half of 2014. It’s still to be determined when the loans will be available in other states. Mosaic will offer investments in the Home Solar Loans to qualified investors via its online platform.

“RGS Energy’s national presence and 35 years of experience as a pioneering solar company makes them a fantastic partner to launch the Mosaic Home Solar Loan, a breakthrough solar financing product that generates cost savings for homeowners as well as profits for American investors,” said Billy Parish, Mosaic’s president and co-­founder. “Homeowners gain all the benefits of ownership with the simplicity of a lease, while investors gain access to transparent and tangible investments in the booming home solar market.”

Kam Mofid, RGS Energy’s CEO, commented, "While we continue to see strong demand for the leasing of solar power systems, there is also increasing interest in direct ownership by the homeowner. So, we are excited to launch the Mosaic Home Solar Loan, which allows people to own their system from day one. This offering helps RGS Energy deliver attractive and affordable solar options, while recognizing that different customers require different solutions to meet their particular needs.”

According to GTM Research senior vice president Shayle Kann, “Residential solar installations grew over 50% in the U.S. in 2013 and continue to boom in 2014. But to date, the majority of those installations have been owned by third parties. The market share of third-party ownership has largely leveled off over the past six months, and we expect to see increasing availability and attractiveness of residential solar loan products this year.”

Mosaic shares that expectation. With homeowners increasingly interested in solar and wanting more options, it’s realistic to expect this product to have high uptake.

In its first year, Mosaic continuously sold out millions of dollars of solar project investments on its platform. This new option is likely to be popular with both investors and homeowners.