The Dawn of the Solar Panel Loan

• April 17, 2014

by Lark Turner

A new startup is promising to make solar panels cheaper for homeowners and may even allow a neighbor to finance the panels for you.

Mosaic, a Oakland, Calif.-based company, is proposing a new structure to help investors more easily finance solar energy. Mosaic works by allowing investors to finance solar projects that need some assistance. Those investors make money by selling the power to the solar consumer and generating interest on the investors’ loan.

The Atlantic’s Tom Woody suggests the new platform could give you the ability to hit up a (wealthier) neighbor for a solar loan. It would “give you a no-money-down, low-cost loan to put solar panels on your roof, and once you pay off that debt you’ll get essentially free electricity as long as you own your home.”

If you’re looking to add solar panels to your home with Mosaic, you have to pay a 4.99 percent interest rate and pay the 30 percent federal tax credit you’ll receive for installing the panels. If you don’t pay the tax credit, the 4.99 interest rate jumps to 10 percent after 18 months. The government is scheduled to reduce the 30 percent federal tax credit to 10 percent in a couple of years, so it behooves investors who think solar is a good deal to jump in while the practice is being federally subsidized.

Mount Pleasant has a community co-op that helps fund solar projects in the neighborhood, but it is structured differently than Mosaic. But overall solar is gaining popularity and normalcy. Tom Woody notes that obtaining financing for solar projects has gotten much easier over the last few years, though competitive interest rates are still in the 6 to 14 percent range.

Image via Flickr user rob.rudloff.

This article originally published at http://dc.urbanturf.com/articles/blog/the_dawn_of_the_solar_loan/8373