Solar loan defaults surge, hitting Wall Street investors - WSJ
By: Editor Louis Juricic (Investing.com)
Solar subsidies won't help with defaults on installed systems. And those defaults won't encourage more credit for rooftop solar.
I wonder how repossessing a rooftop solar installation works? Or will the lenders try to foreclose on the house?
S E E D E D C O N T E N T
Surging defaults on residential solar panel loans are causing problems for bond investors and private-credit funds on Wall Street.
Some bonds connected to GoodLeap, a financial-technology company that provides loans for solar installations, have stopped paying interest due to higher-than-expected homeowner defaults, according to the Wall Street Journal, citing people familiar with the matter.
These solar bonds represent one segment of a growing ecosystem created by nonbank lenders like GoodLeap, which use artificial intelligence and financial expertise to simplify borrowing for Americans. These "fintechs" serve as intermediaries between consumers and debt investors, but rising interest rates have increased loan payments, causing more borrowers to fall behind.
Companies including GoodLeap, Sunnova Energy International (OTC:NOVAQ), and Mosaic provided loans to homeowners through local dealers who sold panels door-to-door.
Problems are now emerging throughout this network, demonstrating how the combination of private-credit and complex bonds can create difficulties. Several of GoodLeap’s competitors filed for bankruptcy protection in June, and some bonds backed by solar loans are trading at significant discounts.
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Another loan bailout wouldn't fix the problem. Didn't work for bailing out student loans. Why would a bailout work to save rooftop solar? The lenders are still going to be reluctant to extend credit.
Policy oriented but not partisan. No interest.