As the world becomes increasingly aware of the importance of renewable energy sources, many companies are looking to switch to solar power to reduce their carbon footprint and save money on energy costs. However, financing the transition to solar can be daunting, and many businesses are hesitant to make the switch due to concerns about upfront costs and complex financing arrangements.
Fortunately, there is good news: financing solar for your company has become easier than ever. With a range of innovative financing solutions now available, companies of all sizes and budgets can switch to solar and reap the benefits of clean, renewable energy. In this article, we will explore some of the financing options available to businesses interested in switching to solar and explain why now is the perfect time to invest in this sustainable energy source.
Why buy solar?
Solar energy is the only renewable energy source that can currently be distributed widely amongst commercial buildings. With fossil fuels slowly running out, the energy created by coal or natural gas will continue to rise in price as utility companies struggle to keep up with increasing demand. The hope is that the electricity grid can be supplemented and stabilized with renewable energy, which is why the adoption of solar is so important.
Besides providing a renewable alternative to non-renewable energy sources, solar power benefits the environment. Carbon emissions produced by coal-fired power plants release 20% of energy-based pollutants. By switching to solar energy, you could save thousands of tonnes of CO2 from entering the atmosphere and contributing to global warming.
Finally, solar energy is a cost-effective investment. Businesses can offset up to 100% of their energy consumption with solar panels and recover their investment in 5-10 years. Solar panels can work for 25-35 years, so the remaining life of your solar panels after ROI can provide you with energy savings for over a decade.
In what ways can you finance a solar installation?
There are several ways in which you can acquire solar panels. We have outlined your options below:
The fastest way to purchase solar panels is with a cash payment. Your installation service will allow you to put a downpayment on your solar panels and begin the installation process. By purchasing the solar panels outright, you can recover 30% of your solar installation costs with incentives and start saving on bills immediately.
Leasing and power purchase agreements (PPAs) are two of the most popular solar financing options for companies looking to switch to solar energy. When a company chooses a solar lease, it can rent solar panels from a third-party provider and pay a fixed monthly fee for the use of the panels. This option allows the company to avoid the upfront costs of purchasing solar panels and provides maintenance and repair services.
On the other hand, with a PPA, the company agrees to purchase the energy generated by the solar panels from a third-party provider at a fixed rate over a set period of time. This option allows the company to benefit from the cost savings of solar energy without owning or maintaining the panels themselves. Leases and PPAs are cost-effective, low-risk financing options that can make the transition to solar energy more accessible for businesses of all sizes and budgets.
Getting a solar loan from a bank vs an installation service.
If you’d like to save time getting a solar loan, you can apply for one upon making a solar installation service. Because solar installation services often partner with multiple financing companies, you will find that they offer a larger range of loans based on loan terms, payment amount and interest rate than individual solar loan banks.
One of the perks of choosing a solar loan over a solar lease is that you own the solar panels outright and therefore qualify for all solar rebates and incentives available in your state, including the 30% federal solar tax credit.
The federal solar tax credit allows businesses to recover 30% of their installation costs on a system placed into service within the tax year. For example, you could recover up to $18,000 on a $60,000 installation.
Other incentives you can consider in conjunction with a loan are the new NEM 3.0 solar net billing policy in California and the new TRECs in New Jersey.
Your company is eligible to participate in net metering. Net billing in California is a new replacement for the current net metering policy. Three utility companies will offer NEM 3.0 to businesses:
- Pacific Gas & Electric (PG&E)
- Southern California Edison (SCE)
- San Diego Gas & Electric (SDG&E)
Net metering allows businesses to save on electricity bills with the excess energy produced by solar panels during peak sunlight hours. Under the new net billing policy, excess energy will have fluctuating worth based on time of use rates. Businesses may find that investing in a solar battery will allow for better time-of-use rates, which are higher at night. Excess energy can be stored in the backup batteries during the day and released at night for maximum savings.
In New Jersey, TRECs are replacing SRECs, allowing homeowners to get a set amount of credits on a 1000kwh of energy produced. Compared to SRECs, which had a fluctuating price, businesses can now accurately calculate ROI with TRECs considered.
As the world continues to recognize the importance of sustainability, more companies are turning to solar energy to reduce their carbon footprint and save money on energy costs. And with innovative financing solutions now widely available, financing solar for your company has never been easier. Whether you’re looking to purchase solar panels outright, lease them, or sign a power purchase agreement, there are various options that can suit your needs and budget.
Financing solar for your company has become so easy that it almost seems like a no-brainer. By making the switch to solar, you can not only save money but also contribute to a better future for our planet. And with advancements in solar technology, solar panels have become more efficient and affordable than ever before, making the switch even more appealing.
So why wait? The time to invest in solar for your company is now. With a variety of financing options to choose from, going solar has never been easier or more accessible. Make the switch today and join the growing number of companies moving towards a more sustainable future.
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