Commercial Solar FinancingJGlassman2017-10-05T12:07:34-04:00
Commercial Financing Structures
Property Assessed Clean Energy (PACE) is a means of financing energy efficiency upgrades or renewable energy installations for residential, commercial and industrial property owners.
Property Assessed Clean Energy (PACE) is a government financing policy that classifies energy-saving upgrades as a public benefit – like a sewer, road extension, solar PV system, etc.
Like other public benefits, PACE projects can be 100% funded by private capital and repaid via a surcharge on the property tax bill.
Payback periods match equipment life (often 20+ years) this makes most projects cash flow positive from day one.
With PACE there is 100% upfront and 20% year financing.
If a sale of your building is possible, the obligation transfers with the property.
You can expect positive cash flow in year one.
No matter who pays the energy bills, the assessments and savings can pass to tenants.
Third party review to ensure pay back of the system.
-Commercial, industrial, non-profit, or multifamily entity
-Does not work for residential government
-Located within operational PACE municipality
-Current on property taxes
-Financed amount generally limited to 35% of property value
-Total property debt cannot exceed 95% of property value
-Not in bankruptcy
-Meets other state statutory requirements
Commercial PPA Model
What is a PPA?
A power purchase agreement (PPA), or electricity power agreement, is a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer).
Typical PPA terms: 10-20 year PPA with option of 5 year extension 0-3% Escalator associated with the contracted PPA rate
PPA Value Proposition
No upfront capital costs – FREE Solar PV
Predictable energy costs/ Hedge against rising utility costs
No system performance operating risks
Projects can be cash flow positive from day one
Visible demonstrable environmental commitment
Potential to make claims about being solar powered
Reduction in carbon footprint
Potential increase in property value
Support local economy and job creation
Commercial Ownership Model
Why Choose Ownership?
The ownership model is the most beneficial to commercial business owners considering to implement a solar PV system. Solar allows you to save a substantial amount of money while becoming energy efficient/ independent. There are 5 key revenue streams that allow an owner to recoup their original investment in MD/DC.