Sunko Solar’s in-house experts serve as your champion to help secure and negotiate the best payment or financing solution for your solar and storage projects. As an independent third-party facilitator, we can help you get the most attractive rates with fair contract terms.
We’ve helped secure financing for large solar power plants, small family businesses and public projects. In fact, we provide access to Power Purchase Agreements (PPAs) for smaller systems that have historically been challenged to find a financier. In addition, Sunko Solar has deep expertise helping our customers use public financing, like Clean Renewable Energy Bonds (CREBs) and special government programs.
September 5, 2018
August 18, 2018
August 18, 2018
Solar is supported with tax incentives, so this needs to be factored into the financing decision. If you can take advantage of the tax benefits and have cash to invest in the solar system, then ownership with a cash purchase is most often the best choice since it will likely provide the greatest financial return over the long run. If tax benefits have little value or you prefer to reserve your capital for other things, then there are better alternatives to going solar.
A PPA is a financing arrangement that allows businesses, government agencies and educational institutions to purchase solar energy electricity without buying the solar equipment. With a PPA, organization pays for the energy produced by a solar system produces, and a third-party installs the solar system on your facilities (or offsite), and owns and operates it.
You simply enter into an agreement to purchase the electricity produced by the system at a predetermined rate per kilowatt-hour (kWh) which is typically lower than your current rate from your utility. And if the solar system doesn’t generate electricity (due to an outage) you don’t pay anything – the system owner bears the operating risk.
Although solar financing is mainstream, it can still be complicated. It’s imperative your solar partner have deep experience in financial modeling and can negotiate financial agreements (PPA or lease) that deliver on expectations for both the off-taker (your organization) and the investor or financier. A partner’s proven track record will provide peace-of-mind that the pricing and terms are reasonable and that a financier will invest in your solar project. Finding a solar partner that understands the technical features of the solar energy system is also a big advantage.
Watch out for low pricing that seems to be below market-value. You want the best financial terms for your solar projects, but sometimes a solar proposal may seem too good to be true. Unfortunately, when a proposal doesn’t come from Sunko Solar, it is often too good to be true, leading to delayed or failed projects because reputable financiers see the project as too risky. Many solar developers that were active three years, and even one year ago, are no longer in business.
Each model has its own benefits and drawbacks to consider. For example:
Cash: When you own your solar project, you have control over the equipment and can provide greater financial ROI in the long run, but you need to account for ongoing operations and maintenance (“O&M”) costs. Sunko Solar provides ongoing O&M services for its systems that can also be supplemented with a long-term Performance Guarantee (“PeGu”).
Lease: With a leased solar system, you, and third-party provider, or Sunko Solar takes care of maintenance and repairs, but the lease rentals are payable whether the equipment is optimally producing electricity or not.
PPA: Instead of renting the equipment, with a PPA you’re buying electricity. Instead of buying electricity from your utility, you are buying from the PPA financier. The PPA provides a locked-in price that protects you from volatile energy price changes, and if the system doesn’t produce energy, you don’t pay for it. But if the system doesn’t produce the expected output, you must purchase remaining electricity needs from the grid.
A high-quality system from a provider like Sunko Solar with a history of strong performance results is important for realizing the projected value of the system, even though the customer only pays for delivered energy.
