O&M Comes to Home Solar Loans, Courtesy of Mosaic and Enphase Energy

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Now that solar loans are becoming more prevalent, what’s to stop them from getting bigger than leases? A lack of operations and maintenance (O&M), that’s what.

But this could be changing. Mosaic, known for crowdfunding solar projects, and microinverter provider Enphase Energy, Inc. (NASDAQ: ENPH) announced at Intersolar North America today that they’re partnering on the first home solar loan that’s packaged with O&M services.

Leases have been huge for residential solar because they let homeowners go solar at no upfront cost. But that’s not all they offer — they also provide worry-free maintenance and performance guarantees, something that hasn’t been available with loans.

Mosaic and Enphase are closing this “service gap” with their new offering, providing homeowners hassle-free ownership of a solar PV system.

Mosaic is aiming to make the whole process as simple as possible. With their automated online portal, the company says homeowners can process all paperwork instantaneously. Through the recently launched Mosaic Home Solar Loan, homeowners maximize their return on investment by keeping the investment tax credit and owning their solar system — and as with a lease, they can do this with no money down.

Another benefit is avoiding any potential issues for the homeowner when selling their house. Though leases can be transferred, the process is not well understood and some sellers have run into issues. The Mosaic Home Solar Loan, on the other hand, can be paid off at any time with no penalty or transferred to the new homeowner.

What do customers get? With the Enphase Enlighten platform, the company can monitor module-level performance through its microinverters, providing the homeowner managed monitoring, analytics, and proactive maintenance programs. Homeowners can even use MyEnlighten to view and share their solar energy production and performance online and with most mobile devices. And of course they get any needed maintenance.

“Mosaic homeowners can now have complete peace of mind when getting a Mosaic Home Solar Loan,” says Billy Parish, Founder and Chairman of Mosaic. “We are thrilled to launch this ground-breaking product with Enphase as our qualified O&M service provider.”

What do installers get? A whole new set of customers who want the benefits of ownership and the comfort of O&M services. Mosaic and Enphase say that working with installers, they will use their marketing capabilities to reach homeowners who are seeking out the bundled offering. And the Mosaic and Enphase software-based platforms bring speed and efficiency to the installer’s sales process, which helps installers close more deals and efficiently manage their working capital. But that’s not all — the new service also mitigates the installer’s time spent on services and O&M, allowing them to focus on selling and installing systems.

“Enphase offers a comprehensive solar energy system with proactive O&M services that will transform the installer’s ability to capitalize on the growing segment of solar loans by having more time and resources to contribute to the sales process,” says Marty Rogers, vice president, global customer service and support at Enphase.

Mosaic expects the new loan product with Enphase O&M to fulfill at least $100 million in loans over the next 18 months.

The new alliance is significant not just for homeowners and installers but also for residential solar loans as an asset class. Lenders and investors have historically viewed solar loans as riskier than their lease counterparts because there is no assurance that the system will continue to produce energy after installation. With the proactive service offering from Enphase Energy, loans now join leases in their appeal to more conservative investors and move one step closer to securitization.

That could also bring us one step closer to the recent prediction by GTM Research of a trend toward solar ownership in 2015.