Commercial Solar Financing
O3 Energy offers financing plans for qualified solar projects in the United States. Depending on the the total project amount, location, and credit worthiness of the off-taker there could be several options available.
POWER PURCHASE AGREEMENT
A solar PPA is now the most popular method for businesses to take advantage of solar for no money down. O3 Energy Solutions Power Purchase Agreement (PPA) allows energy consumers to avoid the expensive capital costs of solar panels, inverters, permits and construction. With a PPA, an energy consumer pays for the electricity generated by the solar array, through a service agreement, for a fixed period of time. PPA's are not a financing mechanism, like traditional loans or leases from lenders. After the initial term has expired, the energy consumer can purchase the system with a buy-back option or enter into a new PPA.- Monthly payments per unit electricity delivered. - Solar PPA electricity reduces your grid electricity purchases. - Flexible lease terms between 10-20 years with extension and early buyout options. - We maintain and manage the system throughout the solar PPA term.
OPERATING LEASE
The Operating Lease’s biggest advantages are that there are no or very little upfront costs for installing the commercial solar system and the client does not need tax appetite. The tax benefits of the Operating Lease are utilized by the lessor and that value is passed back to the lessee in the form of lower lease payments. Unlike a Capital Lease with a fixed purchase price at the end of the lease term, an Operating Lease requires a residual balance of “fair market value” at the end of lease term that typically ranges between 15-30% of the project total cost. A solar lease is a great deal if you want to save working capital or don’t have the necessary tax appetite to take advantage of the ITC and depreciation. - For-profit Companies only (non-profits do not qualify). - Typically a 7 year term. - Payments are fixed for the entire term. - Off balance sheet accounting treatment and lease payments can be deducted as an operating expense.
PACE FINANCING
An increasingly popular option for home energy improvements like solar is property assessed clean energy (PACE) financing. PACE helps business owners finance projects that improve energy efficiency through renewable energy improvements on their property. PACE financing is bundled under a property’s assessment and is paid on the property’s tax bill. PACE pays for 100% of a project’s costs and is repaid for up to 20 years with an assessment added to the property’s tax bill. - PACE offers an attractive financing option to businesses with less than perfect credit who might not qualify for other loan sources. - The building or facility must be within a PACE available areas. - An authorized PACE lender provides the funds to property owners who want to make clean energy improvements, like installing solar panels or other energy upgrades. - Property owners repay the financial institution through an assessment attached to their annual property tax bill.
