Solar PV Financing atCommercial Banks Don Davis, President Capital City Bank – Gainesville firstname.lastname@example.org
Collateral Determines The Repayment Schedule: • 1. Long-term collateral – real estate, liquid (cash, stock, bonds, etc) collateral all allow long term repayment of 10 – 15 years thus lower monthly payments • 2. Short-term collateral – unsecured, non-marketable contracts, equipment, solar panels are generally limited to 3 – 5 years thus higher monthly payments
Lending on Margin • Banks are regulated to insure that they don’t take too many risks thus they are strongly encouraged to lend on margin and the long-to-value guidelines are published by bank regulators. • Banks which exceed those guidelines are required to report exceptions quarterly. Loans on the “exceptions list” are reviewed more frequently.
Innovative Ideas to Extend the Repayment Schedule • Leases normally finance 100% plus a small additional percentage to allow for installation – GE Capital has done some 15 year leases but normally the term is limited to 5 – 7 years • Combining the value of the solar pv system with the value of the real estate.
Incentives For Local Banks to Lend • Local banks are looking for local relationships so that they can benefit from deposits as well as loans. • Local banks are attracted by the potential for you to refer your clients for financing. • Banks are regulated by each state thus loans to out-of-state entities without local ties will raise concerns.
Getting Professionals Up to Speed on Solar • Think about the learning curve for your CPA, Attorney, Insurance Agent, Banker and Investors • Begin educating them NOW! • If any of the group is unwilling to learn or has reservations replace them before you get to a decision point