financing options
Dealing with the financing and incentives for solar power systems can be time-consuming and confusing. Solar Development, Inc. can help you navigate this process with confidence. We can assist you with the rebate application process, arrange financing for the purchase of the solar array, and give advice on tax incentives and depreciation.
Dealing with the financing and incentives for solar power systems can be time-consuming and confusing. Solar Development, Inc. can help you navigate this process with confidence. We can assist you with the rebate application process, arrange financing for the purchase of the solar array, and give advice on tax incentives and depreciation.
rebate payment assignment
Solar Development, Inc. can also significantly reduce the initial cash outlay for the solar power system by "carrying" the rebate for qualifying systems with one-time cash incentives. These rebates are paid out only when the contract is complete, and the system is tested and switched on. Rebates are usually a significant portion of the system value, meaning that a customer would be expected to pay the full value of the contract and then wait for the payment of the rebate at the end of the project.
For qualifying customers, the rebate payment can be assigned to Solar Development Inc. so that you will only be charged the value of the contract less the rebate amount. This reduces the burden on your company and improves your cash flow.
For qualifying customers, the rebate payment can be assigned to Solar Development Inc. so that you will only be charged the value of the contract less the rebate amount. This reduces the burden on your company and improves your cash flow.
power purchase agreements
Over the years, solar energy has become more cost competitive with traditional electricity prices. However, not all organizations have access to the up-front capital needed to invest in a solar energy system. Power Purchase Agreements (PPA's) provide an innovative solution to this dilemma.
advantages
• No up-front capital outlay
• Reduction in electricity bill
• Long-term predictable cost of electricity
• Customer can advertise use of "clean energy"
• No ongoing maintenance costs
• Replaces utility power during expensive peak
periods
• Customer only pays for power produced
• Finance company handles the installation,
operation, and administrative process
• No up-front capital outlay
• Reduction in electricity bill
• Long-term predictable cost of electricity
• Customer can advertise use of "clean energy"
• No ongoing maintenance costs
• Replaces utility power during expensive peak
periods
• Customer only pays for power produced
• Finance company handles the installation,
operation, and administrative process
disadvantages
• Customer is not eligible to receive financial
incentives, including rebates, tax credits, and
renewable energy credits
• Customer does not own the system
• Customer purchases electricity generated by
the solar system
• Customer is not eligible to receive financial
incentives, including rebates, tax credits, and
renewable energy credits
• Customer does not own the system
• Customer purchases electricity generated by
the solar system
For an overview of how PPAs work, check out our PPA Information Sheet.
operating leases
operating leases
Another financing option is an operating lease. With this method, the solar array is owned by a third party and leased to the customer. The customer benefits from the electrical generation, but the other financial incentives such as rebates and tax incentives are redeemed by the lessor, thus reducing the cost of the lease payments.
In an operating lease, the lessor transfers only the right to use the system to the lessee for a specified period of time at a fixed monthly payment. At the end of the lease period, the lessee has the following options:
• Extend the lease for a specified period of time
• Purchase the system at fair market value
• Return the system to the lessor
Since the lessee does not assume the risk of ownership, the lease expense is treated as an operating expense in the income statement and the lease does not affect the balance sheet.
In an operating lease, the lessor transfers only the right to use the system to the lessee for a specified period of time at a fixed monthly payment. At the end of the lease period, the lessee has the following options:
• Extend the lease for a specified period of time
• Purchase the system at fair market value
• Return the system to the lessor
Since the lessee does not assume the risk of ownership, the lease expense is treated as an operating expense in the income statement and the lease does not affect the balance sheet.
financing options
services
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