Commercial Solar Financing Alternatives

If you’re interested in solar for your business but are not prepared to make a large capital purchase, there are a number of financing alternatives you can instead choose.

These include Solar Power Purchase Agreements, more commonly known as PPAs and Solar Leasing.

In this blog we’ll be analysing the difference between these options, and the benefits your business can reap by choosing an alternative to a capital purchase.

 

Solar Power Purchase Agreements (PPAs)

About Solar PPAs

Power Purchase Agreements can offer your business an innovative way to install solar and fix your electricity costs.

A PPA is a great choice as it relieves the need for your business to provide any upfront capital in accessing the benefits of solar power.

With a Power Purchase Agreement, your PPA Provider will take on full ownership and maintenance of the solar system on your roof. You are only required to purchase the electricity your solar PV system generates, which is usually much cheaper than your current grid rate.

 

How does a Solar PPA work?

Infinite Energy will perform a detailed assessment of your business, analysing your electricity consumption profile, roof space, and internal electrical infrastructure.

Once this has been completed, Infinite Energy will provide you with a recommended system type and size, and pricing options. After you have decided on your preferred option, you’ll enter into an agreement to buy the electricity your system generates for an agreed upon time period, for an agreed upon rate.

Once your system has been installed by Infinite Energy and starts generating electricity, you’ll be sent a monthly account for the electricity produced by the system.

 

Key Benefits of a Solar PPA:

- No upfront capital costs

- No technology, service or operational risks

- Electricity price certainty

- Building improvement and green ratings

- Reduced greenhouse gas emissions

 

Solar Leasing

About Solar Leasing

Solar Leasing provides an opportunity for businesses to install solar without the need for capital outlay.

In many cases, the electricity cost savings generated by your new solar PV system will more than offset the lease payments required for the system, meaning your business stays cash-flow positive from day one.

It also means that over the lifetime of the lease agreement, your solar PV system will effectively pay for itself.

After an agreed upon period of time, usually around seven years, your business will own the system outright.

 

“Solar Friendly” Lending Institutions

Often one of the most convenient ways to finance a solar PV system is through your existing banking relationships. Infinite Energy can liaise with your bank to assist in raising funds for the installation of a solar PV system.

Infinite Energy also has strong existing relationships with banks, finance companies and finance brokers who understand the solar case for businesses, and have experience in providing finance on this type of asset.

This includes Verdia, an independent energy services expert.

 

Verdia

Made up of a team of energy and asset finance experts, together with engineers and project directors who’ve led hundreds of successful, large-scale energy projects across Australia and the world, Verdia aims to accelerate Australia’s transition to clean and renewable energy.

With Westpac’s backing, Verdia is able to offer long-term asset finance at market-leading rates.  Finance can be arranged over longer terms, at a lower cost and with no upfront cash investment.

Customers can choose from a range of Westpac equipment finance options, to suit their business needs and accounting requirements.

For more information about Verdia, click here.

 

Bottom Line

Commercial solar has become increasingly popular thanks to falling component costs and rising electricity price rises.

In addition to traditional capital purchases, flexible finance options like PPAs and Solar Leasing have become more common, allowing businesses to remain cash flow positive from day one, while still gaining a long life asset.

Because all businesses are different, the best way to finance your commercial system will depend entirely on your circumstances, budget, and future plans.

Infinite Energy can provide you with a customised financial projection based on your electricity usage, the roof at your premises, the size of solar system you’re considering and the financial options you might be considering.

To request a no obligation callback with one of our expert energy consultants, click here.