Four Ways to Finance Your Solar Power Project
Wednesday , 20 September 2017

Four Ways to Finance Your Solar Power Project

Solar energy is the buzzword of the decade for companies looking to implement progressive policies that will help you save money while reducing their carbon footprint through renewable, clean energy from the sun safely. Solar energy protects your bottom line by reducing your monthly electric bill. In addition, our government offers financial incentives to companies in the form of federal tax credits for investment (which can cover up to 30% of the cost of installing the system), along with tax benefits, such as accelerated depreciation changed. State and local governments also offer incentives, usually in the form of financial aid.

Solar Financing Option # 1 – operating lease

One of the biggest advantages of operating lease paperwork usually generated in a situation imposed by the federal government is reduced. In this type of lease, you should not make an initial investment; Instead, a finance company buys and leases solar system energy back to you on a monthly basis. These leases run much like car leases that at end of period (usually five to twelve years), you have the option to purchase your system up to its fair market value, which usually yields 10- 20% of the total system cost. Meanwhile, the company makes financial incentives and tax benefits, but it will happen these next to you in the form of lower monthly payments.

Solar Financing Option # 2 – Capital Lease

Do you operate a business for profit that generates taxable income? Then you may be interested in the realization of his dream to build a solar energy project without outlaying a lot of capital through a structured as a capital lease loan. This type of loan is usually five to ten years in length, and is similar in nature to a mortgage. Your company receives tax incentives, no money down, and you can buy the loan at the end of the rental.

Solar Financing Option # 3 – Municipal Lease

Municipal Lease contract is most appropriate for these public organizations or nonprofit that want the benefits of solar energy. These contracts are usually longer, ten to twenty-five and that offer rates of all options of possible lower interest rates. In addition, you can buy your solar energy project at the end of the lease as with other options.

Solar Financing Option #4 – Power Purchase Agreement

PAL offers the loan period as long as possible to twenty to twenty five. In this agreement, the financial company that sells the power of your solar energy system at a contracted rate. Although you only pay for the electricity generated, tax benefits are passed on to you as lower payments. It includes maintaining your system in this arrangement. You can always choose to buy the system to its fair market value at the end of your lease.

Whatever type of financing you choose, most companies agree that a solar project can provide many benefits, both financial and environmental.

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