Sungage Financial, CEFIA, and Mosaic announce $5 million deal to offer crowdsourced residential solar loans. The loan product, designed by Sungage Financial, is the first of its kind and uses projected energy savings as the basis for the loans.
There’s been a lot of talk of loans becoming the next big thing for residential solar. While leases have brought solar to far more people, some homeowners still prefer to own their solar installation. But many aren’t willing or able to shell out the large upfront costs. Even with plummeting prices, paying for a solar system all at once can be daunting.
Affordable loans provide one solution. They’re still not the most common way to finance home solar, but more are emerging. Admiral’s Bank and Equal Earth have been at the forefront of providing solar loans to homeowners.
Now there’s a new option: crowdsourced loans for solar installations. Today, a $5 million deal for this innovative financing mechanism was announced by the Clean Energy Finance and Investment Authority (CEFIA), Connecticut’s green bank, Mosaic, a solar finance crowdsourcing company, and Sungage Financial, a platform that enables homeowners to efficiently apply, qualify, and contract for solar financing.
The loan product, designed by Sungage Financial, is the first of its kind and uses projected energy savings as the basis for the loans. Offered through participating solar installers serving the Connecticut market, the loan offer incorporates key protections for the homeowner such as guarantees on system performance.
CEFIA has provided an initial $5 million commitment to fund originations of the consumer loans. Investments in the loan pool will be offered at www.joinmosaic.com with a 15-year term and yields of approximately 5% to accredited investors. Mosaic will crowdsource investments from Americans to fund these loans and facilitate repayments to investors through its online marketplace. Hampshire Foundation, Inc., which made an early commitment to invest $1 million in the loans, is participating alongside Mosaic in the transaction.
“This partnership is creating an entirely new ecosystem for solar financing in which individuals can take part in and benefit from home solar installations,” said Sylvain Mansier, CFO and co-founder of Sungage Financial. “This new loan product represents the next generation of solar financing and Sungage Financial is thrilled to be partnering with CEFIA, Hampshire Foundation, and Mosaic to help homeowners save more through solar ownership.”
Bert Hunter, CIO of CEFIA, said, “This transaction represents what a Green Bank is designed to do. Together with Sungage, we created a residential solar loan product that is easy to access and optimized for solar. We then went out and sourced investment partners who understand the industry and recognize the value of these consumer loans with the green bank aggregating these loans and providing critical credit enhancements.”
“We’re excited to work with CEFIA, Sungage Financial, and the Hampshire Foundation to help Connecticut homeowners finance their solar systems with capital from people across the nation. Mosaic sees great potential in the home solar finance space and is excited about this partnership,” said Greg Rosen, CIO of Mosaic and former VP of Solar Finance at Union Bank.