Commercial Solar Financing Options
There are several conventional and creative ways to finance your commercial solar project. Besides building your solar project, we can help guide you through the various solar financing options and connect you to our network of solar financing partners.
The Benefits of Financing Your Solar Power System
Financing your solar power system offers numerous advantages that make the investment more accessible and financially beneficial for your business. By opting for financing, you can install a solar energy system without the need for a significant upfront payment, allowing you to preserve capital for other business needs.
Financing options often provide immediate savings on energy costs and come with flexible payment terms tailored to your cash flow. Plus, certain financing arrangements may offer tax benefits, further enhancing the overall value of your solar investment.
Preserve Capital
Financing allows businesses to install solar power systems without requiring a large upfront investment, preserving capital for other essential business operations and growth opportunities.
Immediate Savings
With financing options like loans, leases, or PPAs, your business can start saving on energy costs immediately, often paying less per month than you would for traditional electricity.
Flexible Payment Options
Financing provides you with flexible payment terms, allowing you to choose a plan that best fits your financial situation, whether it’s low monthly payments, deferred payments, or options that match your cash flow.
Tax Advantages
If monetizing tax benefits is a challenge in your business, a PPA or an Operating (tax) Lease provides creative financing alternative. Or, a conventional Solar Loan or Capital Lease allows your business to capture the tax credit and accelerated depreciation as well as write-off of interest expense or overall lease payment.
Further Lower Your Solar Costs
Take Advantage of State Incentives
Midwestern states offer special incentives, including Solar Renewable Energy Credits (SREC), solar rebates, and USDA REAP to help you maximize your investment in solar power. Explore available incentives for commercial businesses today.
Available Financing and Payment Options for Commercial Solar
Tick Tock Energy maintains a robust network of financing partners to help you access the best opportunities and resources for your business. Your payment options include:
Cash Payment
If your business has the cash available, this may be the cheapest form of financing and certainly the easiest and fastest transaction. However, keeping your capital for growing your business while leveraging readily available solar financing options may be a great option for you.
Commercial Loan or Line of Credit (LOC)
This simple form of financing allows you to work with a commercial lender or use your business’ existing line of credit. A commercial lender may require your business to securitize the solar project with a lien-hold interest in your property. A standard commercial solar loan may also require a down payment.
Operating (Tax) Lease
In situations where a company has insufficient tax liability or doesn’t pay taxes, an operating lease can be a great option. For flow-through entities such as a limited liability company (LLC) or an S-Corporation (S-Corp), this would be an outstanding choice.
With an operating lease, the leasing company (lessor) owns the solar project for a defined term, typically 5, 7 up to 10 years. The lessor can then captures the federal investment tax credit (ITC) and accelerated depreciation. In turn, the host entity of the solar project (lessee) will pay a monthly lease cost to the lessor. This monthly lease cost is 100% tax deductible to the lessee. At the end of the lease, you can utilize a purchase option at the greater amount of fair market value (FMV) typically 15% or 25% of the purchase price. At this point, the lessor can pay off or refinance the balance for another period (typically 18 months). This option is limited to projects with a $250,000 or larger and may have other requirements.
Capital Lease
One of the oldest forms of commercial solar financing is the basic lease. This option is an easy, low-cost form of financing with characteristics similar to a loan.
The capital lease does not require a down payment and allows the lessee to take the tax credit and accelerated depreciation. It offers a 100% tax-deductible and fixed monthly payment option to pay for the commercial solar project.
Solar Lease & Power Purchase Agreements (PPA):
A “PPA” or solar lease is a popular approach in areas of the US with high electricity rates or incentives. Although these are great mechanisms for financing solar without needing to put money down. A PPA is typically arranged under a 15 to 25 year contract with the building owner, or host. The PPA provider is responsible for insuring, maintaining the array and the host is obligated to purchase the solar electricity at agreed to price. PPAs are typically prohibited in rural coop, municipal utility and some other utility markets. In Illinois, PPA’s are allowed in Ameren and Comed territories.
Commercial Pace Financing
In select areas such as Missouri, commercial Property-Assessed Clean Energy (PACE) financing is a great option for funding both solar and energy-efficiency retrofits on private property. Tick Tock Energy is conveniently located 90 minutes from St. Louis and services the Missouri market.
A PACE assessment ties the project’s investment debt to the property, instead of the property owner(s). The repayment obligation may transfer with property ownership depending on state legislation. Property owners can typically repay their energy improvement costs in between 10 to 20 years as an additional fee to the property tax bill.
Solar Financing for Non-Profits
Many commercial buildings are owned or operated by non-profit entities that do not qualify for solar tax incentives since they are non-taxpayers. A new solar financing product for the non-profit sector which includes churches, schools, government buildings and others can help make a solar panel investment a reality. Call us today and find out more about this exciting option.
Ready to Start?
Request a free quote today
Tick Tock Energy is ready to help you invest in a clean solar energy system on your property, capture lucrative solar incentives, reduce long-term electricity costs, and and enhance the value of your property. To discuss your power needs with one of our solar consultants, request an initial consultation and quote today.
Tick Tock has helped countless business owners across the Midwest enhance the value of their property and reduce their utility costs with solar power systems. Explore our recent installations below.
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204 kW Commercial Solar PV Installation for Aerospace Company Flying S, Inc. by Tick Tock Energy
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