StraightUp Solar offers different financing options to help make your solar project a reality. Call StraightUp at (314) 218-2663 to learn more.
1. Cash Purchase
How Cash Purchases Work
The simplest path to financing a solar project is to purchase the system directly. You buy and operate the solar installation which allows you to directly benefit from any available federal, state and local solar incentives. If you have available capital and tax appetite to absorb tax credits and accelerated depreciation, you may find cash purchases to be the best option.
Benefits of Cash Purchases
Faster and more streamlined processing reduces the total time required for a solar installation, allowing you to begin benefiting from clean, solar electricity as quickly as possible. Greater potential savings since you avoid third party expenses and interest rates. As the system owner, you qualify for a Federal investment tax credit worth 30% of the system’s value. When you combine this with additional state and local rebates, you can offset the cost of a solar project by 50% or more.
Key Cash Purchase Considerations
Although cash purchases transfer the entire solar installation and all associated benefits directly to you, they also transfer the added responsibility of system operation and maintenance. If total savings are your main concern, it is worth exploring cash purchases as a financing option.
However, if you prefer not to devote capital to installing, operating, and maintaining a solar project, consider a Solar Lease instead…
2. Lease & Loan to Own
Benefits of Lease
- Traditional 72-84 month equipment lease10-20 year operating lease
- Low cost path to ownership
- Fixed monthly lease payment
- Cash flow improved by matching lowpayments with energy savings
- Payments are 100% tax deductible
- Early Buyout Option (EBO)
- Depreciation for Lessee after exercising purchase option (based on purchase price)
Key Lease Considerations
- Federal energy investment tax credit (ITC)and depreciation during lease period for lessor
- Personal guarantees are required for privately owned companies with limited exceptions
For larger commercial and industrial solar applications in the 200 kW to 1MW range and larger, you may prefer a Power Purchase Agreement (PPA)…
3. Power Purchase Agreement
A Power Purchase Agreement (PPA) is a financing arrangement that allows business, government agencies, and non-profits to purchase solar electricity with no upfront capital cost. To achieve this, a “host” business or organization provides unused rooftop, land, or parking lot space as a location for a solar installation. A third party PPA provider pays for the cost of the solar installation and assumes all responsibility for ownership, operation, and maintenance once the solar project is complete.
As the host organization, you enter into an agreement to purchase the electricity produced by the system owned by the PPA provider at a predetermined rate per kilowatt-hour, the same unit of measurement on your standard utility bill.
Benefits of a PPA
- PPAs provide access to solar electricity without the burden of owning or operating solar equipment by transferring the initial project cost to a PPA provider.
- Once the PPA contract period expires (typically 10-15 years), you can purchase the system at a reduced price, initiate another PPA, or have the solar installation removed.
Key PPA Considerations
- Entering into a PPA requires a detailed contract and thorough credit review.
- As a result, choosing a PPA will typically extend a project’s timeline relative to other financing options.