Presentation about why businesses should consider installing solar panel systems and available financing options, including loans, capital leases, operating leases, and power purchase agreements (PPAs)
2. Agenda
About
EnergySage
Introduc2on
to
Solar
PV
Why
consider
Solar
PV?
Rebates
and
Incen2ves
Financing
Op2ons
Example
Solar
Economics
Ques2ons
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3. About EnergySage
Expedia
of
Solar
Online
comparison-‐shopping
for
solar
photovoltaic
(PV)
systems
Awarded
SunShot
Award
by
Department
of
Energy
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7. Why Consider Solar PV?
•
Lower,
predictable
energy
costs
– Substan2ally
Reduce
or
Completely
Eliminate
Your
Electric
Bill
– Reduce
or
eliminate
expensive
demand
charges
•
Great
investment
returns
and
tax
benefits
– Greater
than
25%
ROI
•
Benefits
to
corporate
brand
– Customers
and
business
partners
appreciate
sustainability
efforts
– Good
corporate
ci2zens
and
community
economic
supporters
•
Support
local
economy;
Drive
Job
Growth
•
Reduced
carbon
footprint
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8. Rebates and Incentives
•
Federal
Investment
Tax
Credit
(“ITC”)
– 30%
of
the
installed
system
cost
with
no
cap
– An
actual
credit
against
your
tax
bill,
not
just
a
reduc2on
in
pre-‐tax
income
– Can
be
used
against
prior
year
and
future
projects
(consult
tax
advisor)
•
Accelerated
depreciaKon
tax
benefits
– Depreciate
the
cost
of
the
system
over
6
years
– Tax
basis
for
deprecia2on
is
85%
of
the
installed
system
cost
•
Solar
Renewable
Energy
CerKficates
(SRECs)
– All
power
generated
by
your
solar
PV
system
creates
cer2ficates
that
can
be
sold
to
u2li2es
– Approximately
$200
per
megawa]
of
power
produced
– Considered
taxable
income
•
Net-‐Metering
-
When
you
generate
more
power
than
you
consume,
your
meter
turns
backward
to
provide
a
credit
-
Credit
is
applied
at
night
or
when
solar
power
is
not
being
produced
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9. Financing Options
Type
Cash
Purchase
Debt
Financed
Purchase
Description
Cash Out of
Pocket
Get
30% ITC
Depreciation
Tax Benefit
SREC
Income
Yes
Yes
Yes
Yes
Small down
payment
Yes
Yes
Yes
None
Yes
Yes
Yes
None
No
No
Option
None
No
No
No
• Buy the system
• Recoup 50%+ investment in first year through tax
incentives
• Borrow to pay for system
• Recoup 50%+ investment in first year through tax
incentives
• Fixed monthly payments for 7 to 12 years
Capital
Lease
• Benefit from tax credits
• Generate SREC income
• Buy-out system at end of term for minimal cost
Operating
Lease
Power
Purchase
Agreement
• Fixed monthly payments for 7-12 years
• Cost lower than current electricity expense
• Buy-out system at end of term at FMV
• Buy power at rates that are up to 60% lower for a
term of 10-20 years
• Buy-out system at end of term at FMV
(PPA)
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10. Financing Options – Pros/Cons
Option
PROS
•
Own the system
•
Maximum financial benefits
•
Fast & easy process
•
CONS
Operating
Lease
Power
Purchase
Agreement
•
Potential volatility of SREC values
Minimal cash requirement
•
Additional debt on balance sheet
•
Leverage investment for greater ROI
•
Potential volatility of SREC values
No initial cash investment
•
Smaller financial benefits
Tax benefits
•
•
SREC income
Share financials with solar provider / leasing
company
•
Capital Lease
Significant cash required
•
Debt Financed
Purchase
•
•
Cash Purchase
Own the system at end of lease term at minimal
cost
•
Few solar providers offer capital leases
•
Reduce electric bills by up to 60%
•
Smaller financial benefit
•
No initial cash investment
•
•
Option to retain SRECs
Share financials with solar provider / leasing
company
•
Few solar providers offer operating leases
•
Reduce electric bills by up to 60%
•
Smaller financial benefit
•
No initial cash investment
•
•
Hedge against rising utility rates
Share financials with solar provider / leasing
company
•
Few solar providers offer PPAs
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11. Selecting the Right Financing
Option for You
Suitable
Roof
or
Land
for
Solar
NO
Consider
Other
Technologies
YES
Availability
of
Cash
or
Loans
YES
YES
Purchase
with
Cash
or
Loan
NO
NO
Have
Sufficient
Tax
AppeKte
Have
Sufficient
Tax
AppeKte
NO
OperaKng
Lease
or
PPA
YES
Capital
Lease
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12. Example of Solar Options*
•
Massachusetts company
Annual cost = $100,000; $2.5M+ over 20 years with 2.5% inflation
Consumes 750,000 kWh per year ($0.13/kWh)
•
Solution: 600 kW ground-mount system
Out
of
Pocket
Costs
Year
1
20
Year
IRR
Payback
(in
Years)
20
Year
Net
Financial
Benefit
Cash
Purchase
($1.4M)
25%
4
$2.5M
Debt
Financed
Purchase
$600,000
NA
Immediate
$2.2M
Capital
Lease
(10-‐year)
$600,000
NA
Immediate
$2.0M
OperaKng
Lease
(10-‐year)
NA
NA
Immediate
$1.5M
PPA
(20-‐year)
NA
NA
Immediate
$0.6M
OpKon
*Numbers
are
direcKonal
in
nature
only
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13. Example: Cumulative Cash-Flow*
*Rough
es2mates
only
–
EnergySage
can
provide
specific
cash
flow
es2mates
for
your
business
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14. Interested in Solar?
Create
a
property
profile
at
EnergySage.com
Receive
mul2ple
compe22ve
quotes
from
high
quality
providers
EnergySage
advisors
available
to
help
you
Get
a
great
deal
on
solar!
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15. Get Started on EnergySage.com
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