Solar Builder

SEP-OCT 2017

Solar Builder focuses on the installation/construction of solar PV systems. We cover the latest PV technology (modules, mounting, inverters, storage, BOS) and equip installers/contractors with tips and tools to make informed purchasing decisions.

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Page 32 of 55

SOLARBUILDERMAG.COM | 33 The features of a smart sale-leaseback project include: Strong credit all around (developers, PPA offtakers, installers) Positive project cash flow Experienced engineering, procurement and construction management teams Tier 1 components Strong site control Solid PPA Strong incentives Quality operations and management plan/partner Smart sale-leaseback programs allow developers to finance distributed solar projects that otherwise may not be financeable, as this financing structure scales down nicely, following industry trends of lower costs per watt. CONSERVE CASH, GAIN FLEXIBILITY Solar developers benefit from financing solar equip- ment acquisitions by preserving cash and credit lines for other uses. Here are some of the other benefits of financing solar capital expenditures: Potential tax benefits. Equipment financing may provide tax advantages by monetizing the Investment Tax Credit, utilizing Modified Accelerated Cost Recovery System (MACRS) and bonus depreciation benefits. Stimulus benefits. Additional savings opportunities may be available through solar renewable energy credits and grants. Flexibility. Whether it's a tax or non-tax lease, pay- ments can be structured to match budget require- ments, with terms aligned with the solar equip - ment's useful life. Reduced capital outlay. By bundling solar equip - ment with other costs, including design, engineering, development and installation, businesses can acquire what they need with no money down and one fixed monthly payment. In most cases, 100 percent financing can be provided. Be known as a green leader. A solar system is not only a wise financial investment but also supports environmental values. Financing allows organiza- tions to demonstrate commitments to promoting clean energy and reducing their carbon footprint. 10 QUESTIONS TO ASK In the acquisition of solar equipment, it's important to weigh all available options. Here are 10 questions to consider: Before 1. Do I need construction financing? 2. Does the installer have the experience, financial strength, qualified staff and bonding capacity to complete a successful project? 3. Does the project use Tier 1 components? 4. Is the PPA financeable? 5. Does the energy offtaker meet a finance compa- ny's credit requirements, i.e. investment grade credit rating? 6. Do I have good site control? During 7. What are the lease terms, including tenor, month- ly lease payment and end-of-term options? 8. What are my other financial obligations for the equipment (such as insurance, taxes and mainte- nance) during the financing period? 9. Can I purchase the system during the lease term? After 10. Can I return the equipment or renew the lease? With answers to these questions, solar developers can effectively utilize solar equipment financing to conserve cash and build their balance sheets by leveraging PPA revenues and retaining the entire revenue stream, as opposed to selling off the PPA. CHOOSING A FINANCE PARTNER Seek out a financing partner who can accommodate businesses with customized payments to match budget- ary requirements. Make sure the financing company has solar lease financing experience, understands solar project needs, takes the time to ask questions and lis- tens to your responses. Above all, look for a financing company with a track record in renewable energy and a willingness to cus- tomize leasing solutions to help solar developers finance their projects. Doug Beebe and Luis Gutierrez are VPs of energy finance for the eastern and western United States, respectively, for Key Equipment Finance.

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