Loans Now Dominate Solar Financing

In a new report from, solar loans are now the leading source of funding in the residential solar market.

For the first half of 2018, loans amounted to 42 percent of the total share of how home solar panel systems are financed. Third party ownership (leases and PPAs), fell to 34 percent. Cash sales have risen recently to make up the rest of residential market.

The report mentions that the financing company, Mosaic, is the leading provider of solar lending with a market share of 29 percent. While Mosaic is a market leader, they have taken on slightly less business this year to restructure their lending terms.

Much like it is for Mosaic, the solar industry represents a period of flux for some of the major players. For example, Vivint Solar has seen sales decline last year, yet it has recommitted to offering third party ownership. Tesla Energy (formerly Solar City) has pulled back from its residential sales this year by ending its door-to-door sales program and pulling out of Home Depot stores.
solar loans
The one company that seems to be plowing forward at full speed ahead is SunRun. They are the new largest solar installer in the U.S. The company is not shying away from offering leases either.

Future forecasting by the report predicts that loans will continue to maintain its lead over third party ownership, although these leases and PPAs can still benefit from a 10 percent credit after the Federal Investment Tax Credit ends in 2022.

This report did not come as a surprise in the least. In fact, it’s rather unfortunate that loans did not become the primary way homeowners finance their solar installations sooner.

There’s really three reasons why this is the case. First of all, a decade ago all of the large solar installers were heavily pushing solar leases. Second, solar lending was in its infancy and not widely available. Third, homeowners were simply not aware of their options (see reason one).

Solar Power Now has always been a proponent of solar lending, or paying cash when possible. Leasing has never been in the best interest of homeowners. The fact that it still remains a significant percentage of how solar is financed is quite unfortunate.

Homeowners are finally realizing that owning their panels offers many more benefits than leasing. Two of the primary ones are that they end up paying much less over time and they will not have problems selling their home in the future either. Maybe they have also made the connection between home ownership and power ownership. Some have definitely realized that they no longer need to be renters of the electricity that they need.

Hopefully solar lending really does remain the leader well into the future!

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