Unless they have a lot of cash on hand, most Americans rely on financing for the big-ticket purchases in life. That includes major investments like houses, cars - and, now, solar panels. But, while home mortgages and auto loans are familiar territory for many households, sorting through financing options for solar can seem daunting. 

It’s commonly recognized that owning your house or car provides better value than renting or leasing, and homeowners should know that it’s no different when it comes to solar. A study by the National Renewable Energy Laboratory (NREL) estimates that owning solar, whether through cash or with loan financing, saves up to 30% more over the long term compared to leasing. Put another way, EnergySage estimates that homeowners that go solar with a lease only get 10-30% of the savings from solar, with the rest going to the leasing company; by contrast, homeowners that use loans capture 40-80% of solar’s value.

These savings comparisons are often convincing enough, but the benefits of solar loans go beyond the bottom line:


1. Payments Can Go Down Instead of Up

With Mosaic’s solar loans, homeowners have the ability to lower their monthly payments after month 18 if they pay off more than 30% of their loan within 18 months. Also, all the payments stop once the loan is fully paid off. By contrast, leases often have “escalator” clauses tied to utility rates that increase payments over time.

2. Upgrade Your System

If you think you might want to expand your solar installation or add battery storage down the road, it’s straightforward if you own your system - in fact, Mosaic can even provide the financing in some cases. However, if you’re leasing, you don’t own the system, so you can’t add to it. 

3. Flexibility If You Move

Solar leases can be transferred, but the process is arduous and can deter buyers. By contrast, when you go solar with a loan, you have the option of transferring your loan as part of the home sale through Mosaic’s online platform - or, if you pay off the loan, you can keep the panels and take them with you to your new home.

Loans have a pretty compelling case, and it’s unsurprising that it’s being reflected in the market. While leases played an outsized role in driving home solar during its early days, their share of sales peaked in 2014, and loans officially surpassed leases in the fourth quarter of last year. Greentech Media projects that solar loans will account for the majority of residential solar installations for 2017 and beyond, and they summarize the trend well: “Leasing was a necessary temporary solution that sparked the original growth of residential solar, but the future is cash and loans.”

We couldn’t have said it better ourselves! Mosaic was founded to empower ordinary people to prosper from the clean energy revolution, and we’re committed to making it easy for you to have the best financing choice in the market.