Independent Power Producer

Post 16 of 260

Commercial | Financing Options For Any Size Project

Green Power Systems strives to make it as easy as possible to finance solar and provide our clients maximum value. Through a multi-million dollar fund with a leading banking investors, 100% of GPS’ projects get financed on time.  GPS covers transaction services end-to-end, from quote to funding commitment, to construction financing and asset management services. GPS’ finance options deliver solutions that meet our client’s needs, reduce cost, lower risk and shorten time to closing.

Green Power Systems has the expertise to you help you match a commercial solar power solution to with the best investment vehicle to meet your specific needs. GPS’ Power Purchase Agreement (PPA) has become one of the most popular financing vehicles, allowing customers to go solar with no upfront capital costs.  We will work with you to ensure your unique solar energy strategy delivers the greatest total savings on energy costs over the life of your system.  The top three investment opportunities today are:

  1. Buy the systems via a straight purchase;
  2. Lease the system via an 8-10 year operating or capital lease … or
  3. Buy the power via a 20 year power purchase agreement.

Independent Power Producer (cash purchase – own the system outright)

When feasible, purchasing a solar powered system outright can yield the highest return on investment.  The simplest path to financing a commercial 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.

  1. If your company has the cash flow and tax appetite, this is your best option
  2. Use your tax liability to increase your net worth. These systems will pay for themselves
  3. Increase the value of your building immediately
  4. Develop a competitive advantage by decreasing your energy costs
  5. Help qualify your building for LEED Certification and Renewable Energy Certificates (REC’s)
Rising Prices Graph

If you have available capital and tax appetite to monetize the available rebates, tax credits, and accelerated depreciation, you may find a cash purchases to be the best option.

Cash Purchase Benefits

  1. Quick, Streamlined Process
    Reduce the total time required for a solar project and begin benefiting from clean, solar electricity as quickly as possible.
  2. Attain Greatest Potential Savings
    By avoiding third party expenses and interest rates, you can maintain complete control of your solar PV energy system while realizing the highest savings from your solar investment.
  3. Efficient Application of Incentives
    The owner of a commercial solar installation is eligible for a federal investment tax credit, worth 30% of the system value. When combined with additional state and local rebates, the cost of a commercial solar power project can be offset by 50% or more.
  4. Protection from Rising Electricity Prices
    Secure a low electricity rate for the lifetime of the system and reduce your exposure to volatile energy rates.
  5. Promote Clean Energy
    Take advantage of Renewable Energy Credits (RECs) and promote your organization’s corporate social responsibility message by becoming a solar powered company.

GPS offers comprehensive solutions with one goal in mind: delivering the most solar energy possible. Our installations use some of the best products on the market so you realize the greatest total savings on energy costs. In other words, a straightforward cash purchase of a green power system typically offers the maximum return on a solar investment.

Solar Lease (with a $1.00 or FMV buyout)

With fixed monthly payments customers’ know exactly how much to budget for the solar power system. At the end of the lease term (typically 8-10 years), the customer owns the solar facility.  A solar lease allows businesses to generate solar electricity with little to no upfront capital investment. Like traditional equipment leases, solar leases provide use of the solar equipment itself in exchange for a monthly lease payment. You benefit from the clean solar electricity generated from the rented solar installation.  We have financial institutions that offer tax leases and operating leases with no initial down payment.

  1. Tax Leases allow the tax benefits to flow to the customer
  2. Operating leases treat the system as a rental and keep the debt off the company’s books
  3. There are NO OUT-OF-POCKET expenses
  4. Help qualify your building for LEED certification and Renewable Energy Certificates (REC’s)

The combination of known lease payments and lower utility bills typically leads to an immediate reduction in electricity costs and provides increased savings over time. At the end of the lease agreement (typically after 8 – 10 years), you have the option to purchase the system at a reduced cost, renew the lease, or have the system removed.

Solar Lease Benefits

  1. Low Upfront Cost
    There are little to no upfront costs for a lease, allowing you to reduce your initial capital investment.
  2. Save on Electricity Costs
    Monthly lease payments are more than offset by the reduction in monthly electricity bills, resulting in savings on total electricity costs.
  3. Protection against Rising Electricity Prices
    Secure a low electricity rate at a fixed price per kilowatt-hour and reduce your exposure to volatile energy rates.
  4. Flexible Options
    At the end of the term, typically between 10 to 20 years, you may choose to purchase the solar power system for a small, residual value, renew the lease or opt to have the system removed.
  5. Partnership Choices
    Allows you to work with your existing equipment lease financial partners.

Whether you want to work with your preferred financial institution or you want to explore alternatives, GPS can help you negotiate the terms of a solar lease. With an expansive network of specialized solar leasing partners, GPS knows how to accurately forecast energy output, secure favorable lease terms, and streamline the negotiation process to help you minimize your financial commitment while maximizing the return on your solar investment.

Power Purchase Agreement (buy the energy produced)

A Power Purchase Agreement (PPA) is a financing arrangement that allows businesses or government agencies to purchase solar electricity with no upfront capital cost. To achieve this, a “host” organization provides unused rooftop, land, or parking lot space as the 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 after the solar project is complete.  As the host organization, you enter into an agreement to purchase the solar 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.

  1. There are absolutely no upfront costs to the Host Customer or Building Owner
  2. A third party company with the cash flow and tax appetite will own and operate the system through a Power Purchase Agreement (PPA)
  3. The PPA Company will lease your roof through a type of solar easement and sell green power generated from the solar panels back to you at a discount from your utility company rates
  4. After a predetermined time, the system can be purchased at Fair Market Value
  5. While you are saving money on your electricity, you can take advantage of all of the marketing benefits of going solar

A well-structured PPA allows you to reduce electricity costs immediately and realize increased savings over time as grid electricity prices rise. Once the PPA contract period expires (typically after 20 years), you can purchase the system at a reduced price, initiate another PPA, or have the solar installation removed.

PPA Benefits

  1. No Upfront Capital Investment
    No initial capital requirement, since you only pay for the solar electricity that is produced.  GPS eliminates
  2. Fixed Predictable Energy Rates/Prices
    A PPA provides a powerful hedge against volatile electricity markets offering long-term certainty.
  3. Full-Service Project Management & Maintenance
    GPS designs, develops, and operates your solar energy system from start-to-finish. You have no responsibility for owning, operating or maintaining the solar system equipment.
  4. Monetize Tax Credits & Solar Incentives
    Benefit from solar tax credits, even if your organization has no tax liability to offset. The PPA financier is able to monetize available tax incentives and pass these savings on to you in the form of a lower PPA rate.
  5. Positive Cash Flows
    Operating costs are reduced from Day One.  Facilitate benefit from improved planning and budgeting.
  6. Well-defined Exit Options
    Clients have the choice of purchasing the system or having it removed free of charge by SPG Solar.

As one of the pioneers of Power Purchase Agreement, our market-tested process is designed to be streamlined and easy to implement. GPS partners with top tier PPA financiers such as Wells Fargo, GE Energy and Morgan Stanley, and we will work with you to design the best solar PPA to meet your organization’s energy needs.

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