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July 26, 2019

Know Your Commercial Solar Financing Options

Solgen Energy Group commercial solar financing is an increasingly popular and affordable energy option which can help cut your electricity costs. Yet with a range of payment options available, deciding how best to pay can be difficult.

Many companies are eligible to receive a government rebate which can cover up to 50% of installation costs. Commercial solar financing is a low-risk, hassle-free option which provides high yield investments of up to 40% ROI. Additionally, panel performance generally comes with a 90% production guarantee at 10 years and 85% at 25 years.

This article outlines the payment options you can choose from and the benefits and drawbacks of each. It also covers the benefits of using the sun’s power for your business.


Cash purchase

Commercial solar financing via cash purchase provides businesses with the highest rate of returns, though the drawback is that it requires a large upfront investment. If you can afford the initial upfront cost, you’ll be rewarded with the cheapest overall levelised cost of electricity (LCOE).

  • Requires large initial investment.
  • Cheapest in the long run.
  • No ongoing payments.
  • Own system instantly.
  • Panel warranty for 25 years.


Lease

A lease gives you the option of installing panels on your property using a payment plan. This removes the upfront cost and spreads it out over a specified payment term, thereby giving you the benefits of the sun’s energy without a hefty blow to cash flow.

  • Reduced upfront charges.
  • Often cash flow positive.
  • Fixed term.
  • System ownership once term ends.


Power purchase agreement (PPA)

A PPA is a commercial solar financing option that provides long-term hedging to counter future electricity price volatility. It works by letting you purchase the energy produced by the system instead of purchasing the system itself. As such, you are only paying for what the system produces, and this is typically lower than the price you would pay to buy the same energy from the grid.

  • No upfront charges.
  • Only pay for what you use.
  • Cheaper than grid tariff.
  • Fixed term.
  • Insurance provided.


Some of the benefits of using the sun’s energy

Environmentally-friendly

Renewable energy helps reduce pollution and carbon emissions. It provides natural, clean energy which serves as a healthy alternative to coal and can help reduce humanity’s reliance on fossil fuels. It also tends to elicit positive responses from consumers, which can boost your business’ reputation and make your brand seem more respectable.

High ROI

Commercial solar financing provides a high return on investment at up to 40%. This is in part due to government rebates, tax incentives and reduced equipment costs. As such, panels are a great investment for many businesses, providing both long-term savings and swift paybacks. Don’t let the initial upfront costs worry you – they will pay off in the long-run!

Boost profit

If you have spare roof space or additional property where you can install panels, you may be able to make your business some extra money. Installing extra panels allows you to store the sun’s energy for future use, and gives you the option of selling your excess energy to the local power grid.

Ease of maintenance

Commercial solar financing provides you with panels which need little to no maintenance, especially if you aren’t using batteries. Once installed, the panels work silently and cleanly for up to 60 years.

Low electricity costs

Commercial solar financing provides one of the most economical energy sources which is capable of minimising and even potentially eliminating electricity bills. Given that utilities are a large expense for businesses, being able to save money on energy can have a strong effect on reducing overall operating costs.

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