You know you want to invest in a solar project for your facility, but how can you afford it? Verogy helps our customers finance their commercial solar projects through a variety of options. Let’s examine these different solar financing options, how they vary from state to state, and how you can take advantage of them.
When you decide to invest in a solar energy system, you can purchase your solar system outright with cash or with a loan. These are the most direct forms of solar financing. You should consider this financing option if your business has usable capital as well as an available tax appetite. If you select this option, you’ll own your solar panel system directly, and you can take advantage of the tax incentives listed below to recoup your system’s costs.
However, if you don’t have the available capital or tax appetite to purchase your solar system outright, you can finance your system through a solar lease or a power purchase agreement (PPA).
A PPA is an arrangement where Verogy builds and owns your solar array, and you purchase its electricity from us. We sell the electricity to you at a much lower price than your local utility company would. You should consider this commercial solar financing option if you don’t have the capital to purchase your system outright. If you choose to participate in a PPA, you can still work with an experienced solar developer and increase your energy efficiency through renewable energy. The difference is that you’ll use the electricity, but you won’t have to list the solar asset on your balance sheets.
A solar lease is similar to a PPA in that Verogy owns the solar energy system. It differs from a PPA in that with a solar lease, you rent the entire system instead of simply purchasing the electricity from your solar provider. When you choose a solar lease option, you pay a flat payment to Verogy every month. This payment doesn’t fluctuate with the solar markets, so it’s often a less volatile financing solution than a PPA. This is an excellent financing option if you’d prefer not to own your solar system and have predictable monthly energy costs.
If you decide to own your solar energy system outright, you can take advantage of solar incentives that will help you cover the cost of system development, installation, and maintenance. Solar incentives vary from state to state. For example, you can compare Connecticut solar incentives to those in Massachusetts, New York, and Rhode Island. You can also view the DSIRE database of state incentives for renewable energy to examine all the different types of renewable energy for which your state offers incentives. Additionally, our team of solar experts can help you select the right incentives for your business and your specific solar system.
There are many different types of solar incentives, ranging from small grants for solar projects to major financing for utility scale solar projects. Let’s look at an example of a solar energy incentive program:
Massachusetts’ SMART Program is a tariff-based system where participating utility companies pay the incentive directly to solar systems owners. When you apply for this program, your project is put into one of two possible capacity blocks: less than equal to 25 kW AC or greater than 25 kW AC. If you receive this incentive, you can then use it to offset your solar costs.
This example shows how a solar incentive can involve your local utility company as well as how your solar system is considered when you apply for the incentive.
A solar lease is similar to a PPA in that Verogy owns the solar energy system. It differs from a PPA in that with a solar lease, you rent the entire system instead of simply purchasing the electricity from your solar provider. When you choose a solar lease option, you pay a flat payment to Verogy every month.
Reach out to us today to find the right financing options for your commercial solar project. We use our solar industry knowledge and expertise to help our clients turn their solar arrays into affordable realities.