How does the Mosaic solar loan work?
Published on 09 Nov, 2018 by Michael Bishop
Mosaic is reportedly the largest solar-specific loan provider in the United States. As such, they've designed their loan product to work perfectly for a solar-system purchase. This article will explain.
To learn about other popular solar loan options, click here.
Does Mosaic offer the lowest monthly loan payment?
Probably! Here's how: As we wrote about in our last article, a 30% federal tax credit is currently available for solar-energy system purchases. That means that if a solar system costs $20,000, the tax credit value will be $6,000 ($20,000 times 30% = $6,000).
Unlike conventional loan providers, Mosaic is intimately familiar with the solar federal tax credit. They'll offer you a lower monthly payment from the first month onward, with the expectation that you'll make an extra 30%-of-principal payment on the loan within 18 months. In other words, they're expecting you to pass your $6,000 IRS refund check to them (sticking with the example above). If you don't make this extra payment in 18 months, your loan payment will simply go up.
The Mosaic loan payment is also low because the loan term is long — up to 20 years. This makes sense for a long-lived home asset — most solar panels are warrantied to perform well for 25 years.
Can I start saving money immediately with the Mosaic loan?
Again, probably! The cost of solar is less than half of what it was 10 years ago. Meanwhile, electric rates continue going up. For millions of American homes, the no-solar electric bill is higher than a new much-smaller electric bill plus a Mosaic loan payment. In other words, millions of Americans can start saving money immediately with solar.
A downside is that you're giving up some credit flexibility by taking out another loan...but we'll save that for another article.
What’s Mosaic’s interest rate?
Alas, they don't make their interest rates public. Their interest-rate secret sauce depends on your credit score and other factors. In 2016, the Reuters news organization reported that Mosaic interest rates are between 2.49% and 7.99%. If you qualify for a 20-year Mosaic loan with an interest rate closer to 2.49%, your monthly loan payment will be very low. For a $20,000 loan, we estimate $85 per month.
Is the Mosaic loan secured?
Nope! You don’t have to put up your home or anything else as collateral.
How much can I borrow through Mosaic?
They offer loans from $10,000 to $100,000. These loans can also cover energy storage, energy-efficiency improvements, and even remotely-controlled home automation.
Can I pay the Mosaic loan off early?
Yup. Unlike many conventional loan options, there are no early-payment penalties. Perhaps go "all in" by putting your estimated net energy-cost savings towards paying the loan off early.
Putting the Mosaic loan in context with an example
Let's assume a 20-year Mosaic loan with a 3.5% interest rate. And let's assume you'd get a 5.7 kW solar system for $20,000, to help offset about 1,000 kWh of energy usage per month. With an average electric rate of 23¢ and California weather (for example), you'd save around $165 per month on your electric bill. With a remaining electric bill of $65 per month and an $85 Mosaic loan payment (this is our estimate), your new monthly energy cost would be $150. In other words, you'd go from a $230 monthly energy cost to a $150 monthly energy cost. $80 per month is big savings! And this savings starts immediately — you don't have to wait until the solar system has paid for itself.
Thanks to their smart solar lending approach, Mosaic could be a good partner in your solar adventure. And given their close relationship with solar installers across the country, a local solar installer is probably ready to show you what it'd look like to go solar with a Mosaic loan. Connect with top-rated local solar installers quickly and easily here.