Mosaic Sustainable Finance: Policy Reversal Sinks Solar-Fintech Lender Behind $15B Platform

In January 2013, Billy Parish and Daniel Rosen launched a clean energy finance platform. Their company, Solar Mosaic, offered everyday Americans the chance to invest as little as $25 in specific solar projects, earning 4.5% annual returns while funding community-scale installations across California. The first public offerings sold out in less than 24 hours, with over 400 investors committing $313,000.

Twelve years later, the company had grown into a large residential solar lender, funding over $15 billion in loans supporting more than 500,000 households. On June 6, 2025, Mosaic Sustainable Finance Corporation filed chapter 11 petitions in the Southern District of Texas amid elevated interest rates, policy uncertainty, and a 31% decline in installations during 2024. The case moved from petition to confirmation in 91 days and ended with a liquidating plan that transferred the company's loan servicing operations to Solar Servicing LLC, a wholly owned subsidiary of secured creditor Forbright Bank. The loan origination business was shut down.

Company Background

Crowdfunding origins. Billy Parish and Daniel Rosen founded Solar Mosaic in 2010 with a simple premise: solar projects needed capital, and ordinary Americans wanted to participate in the clean energy transition. The initial platform operated as a crowdfunding mechanism enabling retail investors to fund community-scale solar installations. Parish founded the Energy Action Coalition while at Yale. Rosen focused on financial engineering. Investors could commit as little as $25 to specific solar projects, earning approximately 4.5% annual returns over nine years, while Mosaic provided capital to developers at 5.5% interest and retained a 1% spread.

The initial traction supported the concept. When Mosaic opened its first projects to public investment in January 2013, all four sold out within 24 hours. But the founders quickly recognized the limitations of the crowdfunding approach. Community solar projects were complex, development timelines were unpredictable, and scaling required a different model.

The 2014 pivot. In 2014, Mosaic executed a strategic pivot. Rather than funding commercial projects through retail investors, the company shifted to originating residential solar loans directly to homeowners. The new model combined 20-year loan terms with fully digital financing in an industry still dominated by paper applications and fragmented installer networks. Mosaic positioned itself as the intermediary between solar installers (who needed customer financing to close sales) and capital markets (which wanted solar-backed consumer loan assets).

Institutional capital and rapid growth. The pivot attracted institutional backing. In April 2016, Mosaic secured $200 million in warehouse credit facilities from DZ Bank and NY Green Bank, followed by a $250 million facility with Deutsche Bank. These warehouse lines provided the liquidity to originate loans at scale while packaging them for securitization.

In August 2016, Warburg Pincus led a $220 million Series C equity round, with Core Innovation Capital and Obvious Ventures participating. Prior to this round, Mosaic had raised approximately $10 million in venture funding. Guggenheim Securities acted as sole placement agent for the transaction.

By the time of the bankruptcy filing, Mosaic had grown from that initial $313,000 crowdfunding effort into an operation that had funded over $15 billion in loans to more than 500,000 American households. Headquartered in Oakland, California, the company employed a workforce focused on loan origination, underwriting, and servicing.

Leadership transitions. Billy Parish led Mosaic as CEO for 13 years before transitioning to Executive Chair in 2023, with Patrick Moore assuming the CEO role. When the company entered chapter 11, Mark A. Renzi of Berkeley Research Group was appointed Chief Restructuring Officer to oversee the wind-down.

Path to Distress

Interest Rates and Capital Markets Stress.

The business model that worked in a low-rate environment faced pressure as the Federal Reserve raised rates. Consumer solar loans depend on a spread between the cost of capital and the rates charged to borrowers. When warehouse facility costs rose, Mosaic's margins compressed.

In August 2024, Mosaic retained Rockefeller Capital Management to develop a recapitalization plan. The company subsequently engaged Jefferies LLC as investment banker to explore additional capital alternatives. The company pursued recapitalization efforts but did not secure new capital.

Policy Uncertainty.

The Inflation Reduction Act of 2022 extended the 30% federal Investment Tax Credit for residential solar through 2032.

In early 2025, legislation advanced by the U.S. House of Representatives threatened to roll back or eliminate solar tax credits.

The uncertainty became reality on July 4, 2025—less than a month after Mosaic's bankruptcy filing—when the One Big Beautiful Bill Act (OBBBA) was signed into law. The legislation cut short many federal tax credits that the IRA had established. The Senate version terminated the 25D solar tax credit at midnight on December 31, 2025—accelerating the sunset by seven years from the original 2032 schedule.

Residential Solar Market Contraction.

The macroeconomic pressures manifested in installation declines. Residential solar installations fell 31% in 2024. The decline continued into 2025.

According to SEIA market data, the U.S. solar industry installed 7.5 GWdc of capacity in Q2 2025—a 24% decline from Q2 2024 and 28% below Q1 2025. In the first half of 2025, capacity decreased year-over-year in 33 states, resulting in a 12% contraction compared to H1 2024. Consumer demand faced additional headwinds in Q2 from tariff uncertainty and broader economic concerns.

Following OBBBA's passage, SEIA downgraded its base case residential solar outlook by 22%.

Consumer Protection Litigation.

Beyond the macroeconomic pressures, Mosaic faced consumer protection litigation.

Since 2019, lawsuits alleging fraudulent loans had demanded over $3 million from California consumers, with complaints centered on incomplete installations and non-functional systems. Mosaic served as the financing intermediary rather than the installer.

The consumer protection pressure escalated on March 8, 2024, when Minnesota Attorney General Keith Ellison filed suit against Mosaic and three other major solar lenders—GoodLeap, Sunlight Financial, and Dividend Solar. The lawsuit alleged deceptive hidden fees on more than 5,000 solar panel purchases in Minnesota, with hidden charges totaling $35 million and increasing borrower costs by 15-30%.

The Minnesota complaint detailed Mosaic's specific exposure: from 2019 to 2023, the company made at least $85.5 million in loans to 2,147 Minnesota consumers. The average upfront "dealer fee"—the charge that borrowers alleged was hidden—averaged 17.6% of each consumer's loan amount, or approximately $5,843 per borrower. Total upfront fees charged to Minnesota consumers exceeded $12.6 million over the period. Mosaic characterized the complaint as a mischaracterization of dealer fees, and the case was consolidated with similar lawsuits in federal court.

The consumer complaint history extended beyond the Minnesota litigation. According to Consumer Financial Protection Bureau data, nearly 160 complaints had been filed against Solar Mosaic since 2019, with 185 total entries in the CFPB database.

Capital Structure

Mosaic's capital structure at filing reflected the warehouse lending model typical of consumer finance platforms. The company maintained a prepetition secured credit agreement with approximately $113.6 million in outstanding principal, with Forbright Bank serving as administrative agent on behalf of the lender group.

The asset/liability range of $1 billion to $10 billion reported in the bankruptcy filings reflects the significant loan portfolio that Mosaic had originated and, in many cases, retained or serviced. The $15 billion-plus in total loan originations included assets that had been securitized and sold, with Mosaic retaining servicing rights and associated income streams.

Historical warehouse facilities had included lines from DZ Bank, NY Green Bank, and Deutsche Bank, reflecting the major financial institutions that had provided liquidity throughout Mosaic's growth phase.

Chapter 11 Filing and DIP Financing

Petition and first day relief. On June 6, 2025, Mosaic Sustainable Finance Corporation and four affiliated debtors filed voluntary chapter 11 petitions in the Southern District of Texas. The cases were jointly administered under Case No. 25-90156 before the Hon. Christopher M. Lopez.

First day motions included an emergency DIP & Cash Collateral Motion, a Sale and Bidding Procedures Motion, and case management filings to establish scheduling and procedural frameworks. CRO Mark A. Renzi filed a supporting First Day Declaration detailing the company's operations and restructuring rationale.

DIP financing terms. The debtors secured a $45 million DIP financing facility from existing prepetition lenders, with Forbright Bank serving as agent. The facility included $15 million in new money to fund operations during the restructuring process and facilitate completion of partially funded solar installations that were in progress at the filing date.

The DIP structure was provided by prepetition secured lenders rather than new capital sources.

The Interim Cash Collateral Order was entered in June 2025, providing immediate liquidity to maintain operations and complete the sale process without disruption to borrower servicing.

Employee retention. To maintain the servicing operation and ensure continuity during the restructuring, Mosaic sought court approval for a $1.65 million employee retention plan.

Dual-Path Restructuring and Sale Process

Strategic alternatives. The debtors proposed a dual-path restructuring strategy that contemplated two potential outcomes: a debt-to-equity conversion that would reorganize the company under creditor ownership, or an asset sale that would transfer the operating business to a purchaser and distribute proceeds to creditors.

The sale and bidding procedures motion was filed on the petition date, and the court entered a Bidding Procedures Order on July 2, 2025.

Marketing process and outcome. Jefferies LLC served as investment banker, marketing the loan servicing operations to potential acquirers.

As the prepetition secured lender, Forbright was positioned to credit bid its secured claim, acquiring the servicing operations in satisfaction of its debt.

Plan of Liquidation and Confirmation

Plan Evolution.

The path from petition to confirmation included four plan amendments:

The four amendments over approximately three months led to the Fourth Amended Plan of Liquidation, filed on September 3, 2025, and confirmed two days later.

Plan Structure and Treatment.

The confirmed plan was a liquidating plan rather than a going-concern reorganization. The core transaction transferred Solar Mosaic's loan servicing operations to Solar Servicing LLC, a wholly owned subsidiary of Forbright Bank. The more than $8 billion in outstanding loans would continue to be serviced through the new entity.

Critical treatment provisions included:

Secured lender recovery. Forbright Bank, as secured creditor holding approximately $113.6 million in prepetition claims, acquired the servicing operations through its subsidiary. The transaction effectively satisfied Forbright's secured position through the asset acquisition rather than cash distributions.

Servicing continuity. Solar Servicing assumed the servicing infrastructure, personnel, and systems necessary to continue collecting payments on the loan portfolio. The acquirer retained the team to support installers for partially funded loans that were in progress at the bankruptcy filing date.

Borrower protection. A key element of the plan was that borrowers' payment terms and schedules remained unchanged under Solar Servicing's administration. Homeowners with existing Mosaic loans would simply receive new payment instructions directing them to Solar Servicing rather than Mosaic.

Wind-down administration. Olive Advisors, LLC (Jim Birmingham) was approved as Plan Administrator for the Wind-Down Debtors, responsible for implementing the confirmed plan, resolving remaining claims, and distributing any residual value.

No new loan origination. Solar Servicing has no plans to originate new solar loans. The loan origination business that Mosaic built over 15 years—and that had funded over $15 billion to American homeowners—was permanently terminated.

Timeline to Confirmation.

The case ran 91 days from petition (June 6, 2025) to confirmation (September 5, 2025). The plan was amended four times before confirmation.

Post-Emergence Transition

Effective date and closing. The plan went effective on September 22, 2025, with Solar Servicing LLC completing the acquisition of Mosaic's loan servicing operations on the same date. The transaction closed approximately two weeks after confirmation.

Solar Servicing operations. Solar Servicing LLC operates as a wholly owned subsidiary of Forbright Bank. The entity assumed substantially all loan servicing functions, including payment processing, customer service, and loan administration for the $8 billion-plus portfolio. The focus is exclusively on servicing—collecting payments on existing loans and managing the portfolios through their terms—without any origination activity.

Borrower transition. The key protection for borrowers is that their payment terms and schedules remain unchanged. Homeowners continue making the same monthly payments, with only the servicer identity changing from Mosaic to Solar Servicing.

Post-Confirmation Administration

The Mosaic chapter 11 involves ongoing activity involving borrowers, mortgage servicers, and loan ownership disputes.

Relief from stay motions. Multiple mortgage servicers have filed motions seeking relief from the automatic stay. These motions arise when a homeowner with a solar loan also has a mortgage, and the mortgage servicer seeks clarity on collateral rights or the ability to proceed with foreclosure processes.

Consumer borrower claims. Individual borrowers have filed claims seeking determination of loan ownership and challenging various aspects of their loan obligations. These disputes reflect the underlying consumer protection issues that preceded the bankruptcy.

Loan database accuracy. Questions have emerged regarding the accuracy of loan ownership records and databases, creating uncertainty about which entity—the original lender, Mosaic, or securitization trusts—holds beneficial ownership of specific loans.

Adversary proceedings. The case features multiple adversary proceedings involving consumer borrowers:

The adversary proceedings involve consumer borrower disputes and debtor-initiated actions.

Key Professionals

Debtor Professional Team.

Secured Lender Team.

CRO background. Mark A. Renzi, the Chief Restructuring Officer, is a Managing Director at Berkeley Research Group based in the firm's Boston office. He joined BRG in 2016 from FTI Consulting and brings more than 20 years of business experience, including approximately 16 years of financial consulting. His expertise spans fintech, cryptocurrency lending, mortgage originations and servicing, auto finance, installment lending, student lending, structured finance, and consumer finance—a background directly applicable to Mosaic's residential solar lending operations. Renzi has provided restructuring services on more than 35 engagements in both out-of-court workouts and chapter 11 proceedings.

Industry Context: Residential Solar Financing Distress

Sector-Wide Challenges.

Mosaic's bankruptcy did not occur in isolation. The Minnesota Attorney General lawsuit that named Mosaic also targeted GoodLeap, Sunlight Financial, and Dividend Solar—other major residential solar lenders. Sunlight Financial had already filed its own chapter 11 in 2023.

The Minnesota Attorney General lawsuit covered dealer fee allegations across multiple lenders. Residential solar installations fell 31% in 2024, and policy uncertainty increased in early 2025.

Policy Environment Reversal.

The Inflation Reduction Act extended the 30% federal ITC through 2032.

The OBBBA passage in July 2025 cut the timeline by seven years. The 25D solar tax credit terminates on December 31, 2025, rather than 2032.

Market Implications.

Mosaic no longer originates new loans. Solar Servicing continues servicing the $8 billion portfolio.

The SEIA's 22% downgrade to its base case residential solar outlook following OBBBA passage applies sector-wide, not just to Mosaic.

The Forbright Bank acquisition model involved a secured lender acquiring the servicing operation through a credit bid.

Key Timeline

Frequently Asked Questions

What caused Mosaic Sustainable Finance to file for bankruptcy?

Policy uncertainty around solar tax credits, a 31% decline in residential solar installations in 2024, elevated interest rates, and failed capital raise attempts led to the June 2025 filing. The company had retained Rockefeller Capital Management in August 2024 to develop a recapitalization plan, and subsequently engaged Jefferies, but could not secure the needed capital.

What happened to Mosaic's loan servicing business?

Solar Servicing LLC, a wholly owned subsidiary of secured creditor Forbright Bank, acquired substantially all loan servicing operations under the confirmed plan. Over $8 billion in loans continue to be serviced by Solar Servicing following the September 22, 2025 effective date.

Will borrowers' payment terms change after the bankruptcy?

No. Borrowers' payment terms and schedules remain unchanged under Solar Servicing LLC's administration. Homeowners with existing Mosaic loans continue making the same payments, with only the servicer identity changing.

What type of chapter 11 plan was confirmed?

A Fourth Amended Joint Chapter 11 Plan of Liquidation was confirmed on September 5, 2025. This is a liquidating plan, meaning a wind-down of the debtors rather than a going-concern reorganization. The loan origination business was terminated, with only servicing operations continuing under Forbright's subsidiary.

Is Mosaic still originating new solar loans?

No. Solar Servicing LLC has no plans to originate new solar loans. The loan origination business that Mosaic built over 15 years has been shut down. The company now exists solely as a servicing operation for existing loans.

How long did the bankruptcy case take?

91 days from petition (June 6, 2025) to confirmation (September 5, 2025), with the effective date on September 22, 2025. The case required four plan amendments before reaching a confirmable structure, but secured lender support enabled an expedited timeline.

What role did Forbright Bank play in the restructuring?

Forbright Bank was the administrative agent for prepetition secured debt of approximately $113.6 million, provided the $45 million DIP financing facility, and its subsidiary Solar Servicing LLC acquired the loan servicing operations. Forbright effectively controlled the restructuring outcome through its secured position.

Were there consumer complaints against Mosaic before bankruptcy?

Yes. Minnesota Attorney General Keith Ellison sued Mosaic in March 2024 alleging deceptive hidden dealer fees affecting more than 2,100 Minnesota borrowers. Nearly 160 CFPB complaints had been filed against Mosaic since 2019, and California lawsuits alleged fraudulent lending practices.

How does Mosaic's bankruptcy reflect broader solar industry distress?

Mosaic's bankruptcy occurred amid the 31% decline in residential solar installations in 2024, OBBBA's passage cutting tax credits short by seven years, and SEIA's 22% downgrade to its base case residential solar outlook. Other major lenders including Sunlight Financial have also faced bankruptcy, and the Minnesota AG lawsuit named four lenders including GoodLeap and Dividend Solar.

What is the post-confirmation status of the case?

Post-confirmation administration continues with multiple consumer borrower claims, relief from stay motions from mortgage servicers, and adversary proceedings involving loan ownership disputes.

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