Solar Power Financing Options

There are five primary solar power financing options to consider. Depending on your situation, each option has particular advantages.

Solar PPAs

Through a solar power purchase agreement (PPA), owners of land and buildings can gain the advantages of clean, renewable energy with no up-front capital investment.

In a typical PPA, a company installs solar power systems at no cost. The property owner then buys energy at a negotiated rate from Ameresco, just like a monthly utility bill.

Under a PPA, Ameresco designs, builds, owns and operates the solar power system, receiving all tax benefits, installation incentives and operating costs. Since the equipment is completely owned and operated by Ameresco, the property owner has no up-front expenses, no maintenance expenses and no repair expenses.

Benefits

  • Electricity cost savings from fixed price of solar electricity
  • Only pay for solar electricity generated
  • No operating, maintenance or repair costs
  • No capital investment

A Good Choice for:

  • Private enterprises that want to increase renewable energy generation or compliance goals that cannot divert funds to these projects.
  • Municipalities and school systems that lack the budget for major capital improvements but want to control long-term energy costs or meet renewable energy goals.

Energy Savings Performance Contract

With an energy savings performance contract (ESPC), project costs are paid over time from the energy savings realized by the project, eliminating the need for an up-front capital investment.

Under an ESPC, Ameresco installs solar equipment at no cost. The property owner then receives a monthly bill over a fixed period of time to pay for the equipment. Once the ESPC is paid off, you own the solar power system.

Ameresco works closely with its clients to model energy savings and provide options for different systems, based on projected energy savings. Through this process, our clients have the flexibility to choose a system that will deliver the short- and long-term benefits they desire, at a cost they can afford.

Benefits

  • Ownership of equipment at end of contract
  • Potentially lower energy costs during term of contract
  • Fixed monthly payments
  • No capital investment

A Good Choice for:

  • Private enterprises that own facilities with older, less-efficient energy systems that want to control energy costs.
  • School systems and municipalities that want to pursue long-term energy savings but lack the up-front capital for a system purchase.

 

Purchase

Customers who want to receive an Investment Tax Credit, accelerated depreciation, and 100% of the power cost savings may prefer to own the PV system designed and built by Ameresco.

Benefits

  • Investment Tax Credit
  • Accelerated depreciation
  • Reduced electricity costs
  • Retain all other incentives

A Good Choice for:

  • Private enterprises that have cash on hand and want to take advantage of tax breaks as well as energy savings
  • Municipalities and school systems undertaking fully bonded new construction projects or fully bonded renovations of existing buildings.

Operating Lease

For customers with high credit scores, the operating lease yields higher project savings than a solar PPA through lower interest rates. Ameresco designs, builds and operates the PV system, and a bank puts up the capital and owns the system for 10 to 15 years.

Benefits

  • No capital expenses during lease term
  • Lower financing costs than a solar PPA
  • Option to own at the end of the term
  • Lease payment may be treated as an operating expense
  • Banks can monetize tax benefits and pass through as reduced lease payments

A Good Choice for:

  • Private enterprises with strong credit scores that want the most cost-effective approach to solar power development.
  • School systems and municipalities with strong credit scores that want to assume ownership of a system over time.

 

Capital Lease

A capital lease provides loan financing with all the benefits of ownership: Investment Tax Credit, depreciation, solar incentives and 100% of the solar cost savings. Property owners who lease get the same benefits as those who own, with the costs for the solar power system paid out over time.

Benefits

  • 100% of solar cost savings
  • Payback from Investment Tax Credit, solar incentives and accelerated depreciation
  • Capital expenses spread out over time
  • For municipal customers, option of tax-exempt lease

A Good Choice for:

  • Private enterprises that want to control long-term energy costs and meet sustainability goals that lack the capital for an immediate purchase or do not wish to commit available capital to a single infrastructure project.
  • School systems and municipalities that qualify for special forms of capital to develop renewable energy projects.

 

Contact your tax adviser to learn more about available tax credits and depreciation. Before considering an operating lease, consult your financial adviser. Qualification is subject to credit approval.

 

Why Choose Ameresco?

Our solar PV team has an advanced understanding of regulations and is involved with ongoing rulemaking at the local, utility, state and federal levels. We have acted on behalf of our customers to secure all permits and incentives to keep projects on schedule and at the agreed upon price. Our engineers and construction teams have designed and/or built more than 50 megawatts of solar PV projects.

Ameresco has the in-house technology, staff, and systems to continuously monitor solar PV operations, report alarms and problems, and dispatch maintenance staff using our work order management system. We also test and re-commission each site once a year. This O&M experience provides feedback to our design engineers, creating a virtuous cycle for continuous design improvements.

Ameresco offers a full spectrum of services from system conceptualization to support once the system is complete. We can develop, engineer, build, own, operate, finance and maintain (with in-house or outside staff), providing a complete solution. We can operate and maintain any existing solar power system or provide financing through a Solar PPA or ESPC for new construction.


Ready to learn more? Call us at 1-866-263-7372 or contact us online.