Which Financing Option Best Serves Which Commercial Solar Project?

1. Which Financing Option Best Serves Which Commercial Solar Project? Trina Solar

2. Introduction Companies without upfront capital need to overcome the cash crunch of the initial investment, which can be a big stumbling block getting these projects off the ground. Thankfully, there are many options available for financing commercial solar projects. Between PPAs, Commercial Property Assessed Clean Energy (C-PACE), leasing and lending options available, it’s important for developers and EPCs to know which financing tools work best with which types of companies. Developers and EPCs well-versed in financing options - and how they apply to various corporate entities - can potentially find more success in guiding prospects toward a workable solution. Let’s break down some of the more viable commercial solar financing options available.

3. Commercial Solar Financing Options Check out these commercial Financing options: 1. Power Purchase Agreements (PPAs) 2. Solar Leases 3. C-PACE

4. Power Purchase Agreements (PPAs) PPAs have historically been one of the more common funding mechanisms for commercial solar projects. In this scenario, a third party buys and owns the PV system, while the solar customer purchases the power generated from that system. A PPA typically has a 10 to 25-year term length. Developers should understand where these would be good funding options, and where they might not make sense. For tax-exempt entities, such as schools, municipalities, churches and nonprofits, PPAs can be an attractive option because these entities cannot take advantage of the Investment Tax Credit (ITC). These are also useful for companies that do not own property, and therefore cannot use a property tax assessment option.

5. Solar Leases Companies have two options for solar leases: capital or operating leases. Operating leases are not held on the company’s balance sheet, and work more like renting equipment. Capital leases are kept on a company’s balance sheet and are akin to a loan. This makes operating leases more preferable for companies, since they want to keep as much financing off their balance sheets as possible. While some leases have terms of up to 25 years, the majority fall into a range of 7-10 years. These can be a good option for companies with short-term leases on their office or manufacturing spaces and are uncertain on whether they’re going to renew the property lease.

6. 3. C-PACE Despite its many benefits, commercial property assessed clean energy (C-PACE) remains a relatively underutilized financing mechanism. In C-PACE-eligible states, once the commercial project has final approval, the company can obtain a tax assessment on the property while the financier provides project capital. After the contractor completes the PACE-eligible commercial solar installation, the property owner pays for the completed work via a property tax assessment. These payments are then remitted back to the lender.

7. Reducing Project Risk and Boosting Value New smart C&I Solutions can help lower the project’s levelized cost of energy and potentially increase project value. Plus, bifacial modules have made a big difference in boosting project value. Not only do these modules look more aesthetically pleasing, their dual-sided design enables them to capture more sunlight that reflects from underneath it. Using smart C&I Solutions and/or bifacial modules can greatly increase project value while helping to speed up ROI.

8. Want To Know More? https://www.trinasolar.com/us/resources/blog/which-financing-option-best-serves-which-commercial-solar-project

9. Thank you!