Solar finance company files for bankruptcy

[GON]

Mosaic, a solar loan company filed for bankruptcy. I found this surprising, as data pointed to the loan company received commissions of 33 +/- percent off of every solar deal they sold. I supposed its officers were all making seven-eight figures annually. Maybe homeowners with solar loans aren't paying on their solar loan? This gets messier as Mosiac places a lien on every home they have a loan on. I'd love for the company to get liquidated, and the new owner of the loans offering settlements to pay off the loan. I suspect this will not happen, only way for these types of loans and lenders to negotiate is to default on the loan.

Mosaic is a San Francisco based company. Like all big companies going BK, they company bankruptcy judge shopped. Mosiac wants a Texas BK judge over a California BK judge.

Of note, I was required to assume a $47k USD solar loan when I purchased a home last year. Mosaic was the lender. I estimate the cost of the solar if one paid cash was in the $15k-20k USD area.


""On June 6, 2025, Mosaic filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas.

Your loan agreement remains enforceable and you should continue to make your payments as scheduled.

Please note that as part of Mosaic’s chapter 11 cases, Kroll will distribute standard court notices and mailings to different parties of interest as important milestones unfold. Since you are a Mosaic borrower, you are considered a party of interest. Attached you will find the first of those documents, the Notice of Commencement, which provides notice regarding the beginning of the chapter 11 process. You do not need to take any action upon receipt of this notice.

Throughout the Court-supervised process, Mosaic expects to remain fully operational without disruption, and the Company remains committed to servicing our customers. "'

 

[JeffKeryk]

NEM3 killed solar. To make it barely fiscally doable, you need a battery, which doubles the cost.

 

[SC Maintenance]

Chapter 11 is just bankruptcy re-organization.

They wrote the loans, but they had to get the money from someone - who now wishes to be paid. Also, most commercial loans are written for 5 years then the re-set. So 5 years ago we were in zero interest rate policy, and now there likely having to refi at least 5% higher.

The Chapter 11 will affect the companies creditors. Unfortunately you will still be on the hook.

Best news for you would be the filed Chapter 7 - which is still possible if there not able to re-organize. During liquidation they would sell the debt. Whomever buys it might take a buy out. I know you have published this before - but what is the interest rate on the note?

 

[GON]

I know you have published this before - but what is the interest rate on the note?

1.99 percent.

I would have thought they sold bonds to fund the loans.

My guesstimate is Mosaic charged $17,000 fee to fund the loan.

Original loan amount : $50k USD
Interest rate: 1.99 percent
Amount Mosaic actually funded: $37k USD
Amount Mosaic put in their pocket by funding the loan: $17,000 (amatorized or, did they borrow $50k and pocket the $17,000 on the spot?) (knowing a bondholder would be a bag holder, which appears very likely as Mosaic in in BK).

 

[OVERKILL]

NEM3 killed solar. To make it barely fiscally doable, you need a battery, which doubles the cost.

Yes, NEM 3 hacked away all the generous subsidies so that solar could basically stand on its own 2 feet like VRE advocates for it, and wind, have been arguing it can do. Uptake of course tanked, because it was no longer a license to print money and, as you note, with a battery, the capital tied up in it now will take even longer to pay off, even though the compensation with a battery is better.

 

[SC Maintenance]

I would have thought they sold bonds to fund the loans.

No, it looks like they securitized the loans and sold them. So someone else is actually holding your note - mosaic was just originator and servicer.

"Mosaic said it “expects to remain fully operational without disruption” and plans to maintain its loan servicing operations.
...

Unlike competitors who sell their loans quickly and frequently, Mosaic used a more complex funding approach that involved accumulating hundreds of millions of dollars worth of loans for months before selling them all at once in large investor sales. This business model typically requires more consistent access to credit and investor appetite compared to models that sell loans more frequently—which can become unstable amid market uncertainty."
https://www.energysage.com/news/mosaic-pauses-solar-loans-amid-tax-credit-uncertainty/

 

[4WD]

NEM3 killed solar. To make it barely fiscally doable, you need a battery, which doubles the cost.

And video killed the Radio Star ️

 

[JeffKeryk]

And video killed the Radio Star ️

I'm gonna talk to a local solar company tomorrow to see about upping my solar array. Dang Tesla is a thirsty pig!
Far fewer solar companies around.

 

[OVERKILL]

I'm gonna talk to a local solar company tomorrow to see about upping my solar array. Dang Tesla is a thirsty pig!
Far fewer solar companies around.

Make sure you check the terms of your NEM 2 contract, I THINK you are allowed to increase the capacity slightly, but I would double check. You don't want to violate the agreement and then get paid market.

 

[JeffKeryk]

Make sure you check the terms of your NEM 2 contract, I THINK you are allowed to increase the capacity slightly, but I would double check. You don't want to violate the agreement and then get paid market.

Spot on. My understanding is I can up my system to a certain degree, keep NEM2 and get the 30% federal tax credit thru this year or maybe next.
@UncleDave mentioned this before; it's time for me to move.

Cinnamon Energy is a local Los Gatos vendor my neighbors rave about. As you know, I like to support local business where possible.
My next door neighbors missed out; they are on NEM3. They don't care for Elon but had to add the Tesla Powerwall to make it all work. Big bucks; their breakeven point has to be numerous years out. You snooze you lose. In my case, sometimes you get lucky.

 

[OVERKILL]

Spot on. My understanding is I can up my system to a certain degree, keep NEM2 and get the 30% federal tax credit thru this year or maybe next.
@UncleDave mentioned this before; it's time for me to move.

Cinnamon Energy is a local Los Gatos vendor my neighbors rave about. As you know, I like to support local business where possible.
My next door neighbors missed out; they are on NEM3. They don't care for Elon but did add the Tesla Powerwall to make it all work. Big bucks; their breakeven point has to be numerous years out. You snooze you lose. In my case, sometimes you get lucky.

https://bakerhomeenergy.com/kc/how-much-solar-can-i-add-without-losing-nem-1-or-2-benefits/

• Total System Expansion Cap: Homeowners can increase their system size by up to 10% of the originally approved system capacity without triggering a transition to NEM 3.0. This means if your original system was 5 kW, you could add up to 0.5 kW (or 500 watts) without issue. In most cases this is such a small addition it is not worth it.
• Load Justification Requirement: If you want to add more than 10% of your original system size, you must justify the expansion based on an increase in your energy usage. This could be due to an electric vehicle, home additions, or new appliances. If the utility determines that your increased load justifies the system expansion, they may allow it while keeping you under NEM 1.0 or NEM 2.0.

Given that you basically don't get a bill, I think you'd have an EXTREMELY hard time with the load justification angle, which limits you to the 10% increase. The penalty is apparently not Market, but NEM 3, which may in fact be even worse, lol.

So yes, be careful!

 

[JeffKeryk]

@OVERKILL part of the reason my electric bill is low or zero or even negative is, I asked the solar companies to up my system beyond their calculated size because I knew I was retiring soon and also might buy an EV one day. The EV came a lot sooner than I thought.

 

[OVERKILL]

@OVERKILL part of the reason my electric bill is low or zero or even negative is, I asked the solar companies to up my system beyond their calculated size because I knew I was retiring soon and also might buy an EV one day. The EV came a lot sooner than I thought.

Yep, so with that already factored into your system size, it's going to be an extremely hard sell for capacity beyond the permitted 10%.

 

[GON]

No, it looks like they securitized the loans and sold them. So someone else is actually holding your note - mosaic was just originator and servicer.

"Mosaic said it “expects to remain fully operational without disruption” and plans to maintain its loan servicing operations.
...

Unlike competitors who sell their loans quickly and frequently, Mosaic used a more complex funding approach that involved accumulating hundreds of millions of dollars worth of loans for months before selling them all at once in large investor sales. This business model typically requires more consistent access to credit and investor appetite compared to models that sell loans more frequently—which can become unstable amid market uncertainty."
https://www.energysage.com/news/mosaic-pauses-solar-loans-amid-tax-credit-uncertainty/

Guess I need to relook at the definition of a bond.

I thought mosaic packaged the loans, sold the loans to let say a pension fund, and as part of what was sold was a guarantee to service the loans that were packaged. This is what Carvana does.

Maybe I should have called what Mosaic was selling would have better been described as a financial instrument, instead of a bond.

The risk should be to the financial instrument/ bond holder. Not Mosaic unless Mosaic guaranteed the financial instrument/ bond.

If the last paragraph is accurate, I can't see how Mosaic is bankrupt. They are receiving monthly fees for servicing the loans from the bond holders, Mosaic took a massive profit from the loan origination fee.

Makes no sense they would be in bankruptcy unless the booked as profit what should have been put in reserves the loan origination fees.

 

[PandaBear]

If nobody gets new solar installed, then the financer would also run out of customers.

33% commission sounds like a lot until you see how many man hours it takes to close a deal (walking door to door, buying lunch at large companies to show a bunch of people how it works and hoping 1/100 will sign up with them. I ate a lot of free sandwiches thanks to these solar companies. Also didn't say is whether they subsidize their commissions to close the deal. I know when I refi my mortgage I find some out of state brokers who would pay $2k of their own money to close the deal and give that back to me as closing cost, etc.

 

[SC Maintenance]

Guess I need to relook at the definition of a bond.

I thought mosaic packaged the loans, sold the loans to let say a pension fund, and as part of what was sold was a guarantee to service the loans that were packaged. This is what Carvana does.

Maybe I should have called what Mosaic was selling would have better been described as a financial instrument, instead of a bond.

The risk should be to the financial instrument/ bond holder. Not Mosaic unless Mosaic guaranteed the financial instrument/ bond.

If the last paragraph is accurate, I can't see how Mosaic is bankrupt. They are receiving monthly fees for servicing the loans from the bond holders, Mosaic took a massive profit from the loan origination fee.

Makes no sense they would be in bankruptcy unless the booked as profit what should have been put in reserves the loan origination fees.

I think your definition's are correct - but I do think these all (and car loans) are technically annuities, not that it matters for our discussion. The point being the old loans have long been sold to someone else, so that is not the reason for the mosaic bankruptcy.

I suspect their chapter 11 has something to do with this from my link above "Mosaic used a more complex funding approach that involved accumulating hundreds of millions of dollars worth of loans for months before selling them all at once in large investor sales"

So they likely have a whole bunch of new loans sitting on their books, but because of all the reasons listed those loans are worth less to an investor at the moment than they might have been in the past, hence no buyers. So Mosaic borrowed short term money to originate these loans but now has no cash flow - ie illiquid. There likely also worth less than originally borrowed short term, so it could turn into chapter 7, but there not there yet.

The outstanding loans - like yours - would in fact no longer be there problem if a separate investor owns them now.

 

[97prizm]

Yes, NEM 3 hacked away all the generous subsidies so that solar could basically stand on its own 2 feet like VRE advocates for it, and wind, have been arguing it can do. Uptake of course tanked, because it was no longer a license to print money and, as you note, with a battery, the capital tied up in it now will take even longer to pay off, even though the compensation with a battery is better.

I always thought that with solar it was either it offset your electricity usage durian peak times or put excess capacity back to the grid if you were using very little. Are some solar panels set up with a battery pack now?

 

[macarose]

What a strange situation.

Here in Georgia I'm paying 7.5 cents a kWh and if I need enough it for our EVs, the cost goes down to 6 cents.

Sometimes it cost me only a penny a mile to commute.

However Georgia Power customers have to pay surcharges for the ridiculously expensive Plant Vogtle. My neck of the woods opted out of that boondoggle, but I will say it's created some healthy jobs in the eastern part of the state.

We also have a ridiculously expensive annual EV tag renewal that's around $200 now if you're an individual and even more if you're a business. It's really a joke. These vehicles do absolutely no damage to the transportation infrastructure, and the usage costs are far less than that fee.

Solar is going to have one tough mountain to climb over the next several years here in Georgia. We don't subsidize it. Most mainstream folks aren't interested in technology at all because electricity is so cheap and plentiful.

 

[Snagglefoot]

What a strange situation.

Here in Georgia I'm paying 7.5 cents a kWh and if I need enough it for our EVs, the cost goes down to 6 cents.

Sometimes it cost me only a penny a mile to commute.

However Georgia Power customers have to pay surcharges for the ridiculously expensive Plant Vogtle. My neck of the woods opted out of that boondoggle, but I will say it's created some healthy jobs in the eastern part of the state.

We also have a ridiculously expensive annual EV tag renewal that's around $200 now if you're an individual and even more if you're a business. It's really a joke. These vehicles do absolutely no damage to the transportation infrastructure, and the usage costs are far less than that fee.

Solar is going to have one tough mountain to climb over the next several years here in Georgia. We don't subsidize it. Most mainstream folks aren't interested in technology at all because electricity is so cheap and plentiful.

The Georgia Power site says the average power price is 14.7 cents per kwhr. How is it your price is 7.5 cents? Are there some riders etc attached to your bill you aren’t including?

 

[macarose]

The Georgia Power site says the average power price is 14.7 cents per kwhr. How is it your price is 7.5 cents? Are there some riders etc attached to your bill you aren’t including?

I do pay $30 a month for basic service but that's it.

In the late '90s it was only $10. Georgia Power had a $10 fee for much longer.

That monthly maintenance fee has always irked me.