A tech brings a list of solar financing options
A tech has a variety of financing options and partners to give you options on purchasing your solar project. We have partnerships with the top lenders and financial institutes with vast solar experience, providing a smooth path to project procurement. One of the first steps in our feasibility process is to review your situation and help decide which the best options to consider are.
When possible, a cash purchase will almost always deliver the greatest savings and highest IRR. Systems with will usually have a payback of 4-6 years. Tax incentives cover about 64% of the system with almost 40% captured the first year. Cash purchase provides the best financial return if you have tax liability. Check with your accountant.
- Greatest savings
- Full ownership
- 4-6 Year Payback
- Significant upfront capital investment
- Requires large tax incentive appetite
Leasing can be a good option when looking to finance with no money down. A tech financing partners offer a few leasing options, depending upon whether you need a tax credit or not. The term is usually 10 years. With no money down and fixed annual payments that are often lower than the savings generated by your solar system this can be a good option.
- $0 Down
- Cash flow positive
- 10 year term
- Smaller system (< 30kW) can be financed
- Savings not as good as Cash Purchase
Power Purchase Agreements (PPA)
A Power Purchase Agreement (PPA) provides solar financing without making any upfront costs. Basically, an investor will install a solar system on your property, own and maintain the solar system. He will take the tax credits making the payments to you lower, and will charge you for the energy it produces at a predetermined rate. No unexpected rate increases and no maintenance issues on the system. Terms usually are 20 -25 years. The tax credits go to the investor deal for those who are interested in lowering the cost of their electricity, but who have little or no interest in owning the system outright.
- No Upfront Capital Requirements
- Good option for entities with no tax appetite (non-profits)
- Usually Positive cash flows
- No maintenance or upkeep issues
- Not as good a return as for cash purchase or leases
PACE (Property Assessed Clean Energy)
PACE is a program where the cost of the system is added to the building owners’ property tax, which he pays back over time. With no up-front costs and longer financing periods available the cash flow is usually positive the first year. The owner still can take the tax credits, and if he sells the property the system and the payments go to the new owner.
- No upfront capital requirements
- Good option for entities with a tax appetite
- Usually cash flow positive the first year
- Not available in all areas, and property is subject to assessment to qualify