Capital Lease or Long-Term Loans: Borrow the Capital,
Own the System, Use the Energy
·
Like a bank loan or mortgage, but pay no
upfront costs
·
Customer owns and maintains the system
·
Owner uses the financial benefits of solar
(state and federal tax credits, local incentives, and avoided energy costs) to
pay down cost of system
·
Stay cash-flow positive through the life of
the system
Operating Lease: Lease the System, Use the Energy
·
Third-party financier owns the system and
takes advantage of the federal tax savings while leasing the system to the
property owner
·
Monthly lease payments to financier are
reduced through energy savings
·
At the end of the lease (~7-10 years)
property owner can purchase the system at Fair Market Value (FMV), which is
estimated to be 20% of the original system cost, renew the lease, or return the
system to the bank
Power Purchase Agreement: Buy the Energy
·
Third-party financier owns and maintains the
system on your property
·
Power produced is fed back into the
customer’s electrical service to offset the utility bills
·
Rate is pre-negotiated, so you know how much
you will be paying over the lifetime of the agreement (~15-25 years)
Solar Services Agreement (SSA): Fixed payments based
on monthly solar PV production, true up at the end of the year
·
Financial arrangement in which a third-party
developer owns, operates, and maintains the photovoltaic (PV) system, and a
host customer agrees to site the system on its roof or elsewhere on its
property and purchases the system's electric output from the solar services
provider for a predetermined period.
·
This financial arrangement allows the host
customer to receive stable, and sometimes lower cost electricity plus local
incentives, while the solar services provider or another party acquires
valuable financial benefits such as tax credits and income generated from the
sale of electricity to the host customer.
·
With this business model, the host customer
buys the services produced by the PV system rather than the PV system itself.
·
SSA arrangements enable the host customer to
avoid many of the traditional barriers to adoption for organizations looking to
install solar systems: high up-front capital costs; system performance risk;
and complex design and permitting processes. In addition, SPPA arrangements can
be cash flow positive for the host customer from the day the system is
commissioned.
·
At the end of contract, agreement can be
extended, system can be removed, or system can be purchased by property owner
