Vivint Solar Plans Loans for Rooftop Customers Later This Year

(Bloomberg) — Vivint Solar Inc., the rooftop-panel leasing
unit majority owned by Blackstone Group LP, plans to offer loans
to customers who prefer to buy their systems by the end of this
year.

Most customers sign a 20-year agreement to buy electricity
generated by their rooftop systems, which Vivint Solar installs
and maintains. The Provo, Utah-based company hasn’t released
terms and rates for the loans, though “they’ll be very
similar” to mortgage rates, Chief Executive Officer Greg Butterfield said in an interview.

“Someone would be able to buy the system for fair market
value, they’d own it, and the probability of paying that system
off in an earlier timeframe is a benefit of that,” Butterfield
said. “Most people don’t have the luxury to be able to pay cash
for one, or would prefer not to take a loan out because of it
showing up on a credit report, but we’re going to have all
options.”

States including New Mexico still don’t allow leases for
solar systems, so offering loans is a way to diversify and reach
additional customers, said Pavel Molchanov, an analyst at
Raymond James & Associates Inc. in Houston.

“There are several states that have restrictions or bans
on solar leases, and a solar loan can get around those,”
Molchanov said in a phone interview Tuesday. For homeowners who
prefer buying their systems “a loan enables them to do that,
while at the same time avoid putting up cash up front.”

SolarCity Loans

SolarCity Corp., the largest U.S. residential solar
provider, said in October it would begin offering loans in
addition to power-purchase agreements. The San Mateo,
California-based company is offering 30-year terms at annual
rates of 4.5 percent to 4.99 percent, according to its website.
SolarCity said on March 4 it’s expanding to New Mexico.

Most Vivint Solar customers still are expected to choose
20-year power-purchase agreements, Butterfield said.

Vivint Inc., a home security provider that formed the solar
unit, was acquired by Blackstone Group in 2012 for about $2
billion. Blackstone retains a 78 percent stake in Vivint Solar.

To contact the reporter on this story:
Justin Doom in New York at
jdoom1@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Carlos Caminada, Robin Saponar

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