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New residential loan options make paying for solar easier

In 2018, more than 300,000 residential solar systems were installed and that number is expected to grow in 2019. To make it easier for these green-minded consumers to go solar, last week, two companies, EnerBank USA and Mosaic, each announced offerings that will help solar installers and homeowners get access to the capital needed to pay for solar PV systems.

EnerBank USA, a national consumer lender that works with strategic business partners and independent home improvement contractors, announced a new Triple Option Loan for contractors to offer homeowners who are installing solar panels and expect to receive income tax incentives, rebates, and/or other significant payments. The new loan features a 12- or 18-month no-payment period and three re-amortizations of principal and interest over the life of the loan, providing homeowners the ultimate flexibility in choosing how they want to pay for their projects.

During the 12- or 18-month no-payment period, customers are not required to make payments on the loan. If the entire principal amount is paid off before the expiration of the no-payment period, all accrued interest is waived. After the no-payment period, the loan is re-amortized, followed by two more re-amortization events each May of the following years. This allows homeowners the option to apply rebates, bonuses or tax refunds to reduce the amount of their monthly loan payment.

Next-gen loans

Six years after Mosaic began offering financing options, the company announced what it is calling the next generation of solar loans, PowerSwitch 6. Backed by a global private equity firm and partnerships with top-tier financial institutions, Mosaic also announced that it has helped nearly 100,000 households go solar with its financing since the company’s inception.

PowerSwitch 6 bundles together several new features designed to improve solar installers’ cash flow, streamline processing, expand their markets, and lower their customer acquisition costs:

  • Household income: Homeowners may use verifiable total household income when it is needed to qualify for the loan.
  • Daily funding: Mosaic now has faster funding, cutting the time between the customer qualifying for the loan and the installer receiving the funding to 1-2 business days after submitting milestone evidence.
  • Early disbursements: Qualified contractors can now receive final loan disbursement at the time of installation, improving cash flow.
  • Simple milestones: Easy milestone evidence for qualified installers simplifies how to validate that disbursements should take place, regardless of which jurisdiction the customer is in.
  • Soft credit checks: Contractors can prequalify homeowners early in the process, checking their ability to qualify for financing without negatively impacting their credit score, improving sales teams’ time management.

The PowerSwitch 6 suite offers two loan structures — PowerSwitch CHOICE and PowerSwitch PLUS — which complement Mosaic’s home improvement loan.

The existing loan offering, renamed PowerSwitch CHOICE, is for customers looking to add solar or solar and batteries to their home and take advantage of the 30 percent federal tax credit to pay down their loan during the first 18 months.

The new loan structure, PowerSwitch PLUS, provides a loan amortization schedule designed for customers who don’t expect to receive a tax credit or who want to re-roof or make other energy efficiency improvements on their home at the same time as adding solar or solar and batteries, with payments reassessed at 18 months to reward any principal repayments.