Increased environmental awareness has led to more and more businesses turning to green-conscious energy solutions, such as solar energy. Not only does it help the environment, but solar energy saves costs in the long-run. However, the transition is far from easy. How do you go about switching your energy source? And how do you finance this operation?
Since 1988, Compass Solar Energy has offered high-quality solar design and installation to both commercial and residential clients. As the leading commercial solar provider in Northwest Florida, it has a history of happy customers and a transparent financing system. Here’s how commercial financing with Compass Solar Energy works.
In general, costs depend on the size of the solar energy project and the financial history of the organization ordering the project. When financing a commercial solar project, there are five questions you need to ask:
- Who are you?
- What type of commercial solar system do you want?
- Where are you located?
- When do you need solar energy?
- Why do you want commercial solar energy?
Your answers to these questions will help determine the best commercial solar financing options for your organization’s needs.
Who Are You?
Commercial financing rates vary depending on the type of organization; businesses, governmental offices and schools have different options available to them. Property ownership is not an important factor here (unless you’re interested in a PACE loan).
Taxable entities benefit the most from direct ownership due to the associated tax credits. If your organization is not a taxable entity, or you simply don’t want to worry about maintenance issues, then ownership may not be the best option for you. If you can’t take advantage of tax incentives, you may want to consider leasing–in this case, you may receive reduced electricity costs and lease payments from the system owner.
Public entities such as schools have more funding options available to them than private enterprises. These include:
- Bond elections
- Block grants
- Tax-exempt municipal leases
Ultimately, the type of organization you have will affect the financing options available to you. All properties interested in solar energy need to complete an Interconnect Agreement with the local power company to connect to its power grid. Compass Energy helps guide clients through this process.
Financing opportunities to cover your entire commercial project
Pay negative interest on your project's monthly payments
What do you want?
Costs vary based on the type of solar system you’re planning to install. A rooftop solar panel is the most common type, and typically the least costly. However, not all buildings have rooftops that can host solar panels.
In these cases, you might consider a ground mount, which is slightly more costly. With a ground mount, solar panels are held in place by frames. Another option–and generally the most expensive one–is a solar canopy, which involves an overhead canopy that consists of solar panels.
Some organizations may be able to choose between any of these options. However, others might not have that choice based on the layout of the building. Either way, the system type will play a role in the overall price.
Where Are You?
Tax laws change based on location; whether or not you can receive tax credits depends on the state you live in. Moreover, net metering rules–in which system owners receive credit for the electricity they contribute to the grid–also vary based on location. Thus, where your organization is plays an important part in the commercial financing process.
When Do You Need Your System?
If you need your system as soon as possible, then you should go with a speedy commercial financing plan. Making your purchase with cash is the quickest–and fastest–option. To pay with cash, your organization needs to have a solid amount of capital available. Some third-party loans also might ask for a down payment.
On the flip side, if you’re not in a rush you might consider paying with credit. In these cases, your organization needs to have a good credit score to obtain a solar lease agreement or get a third-party loan.
Why Commercial Solar?
The reasoning behind your desire for a commercial solar system can influence your financing options. For example, if your goal is to lower energy costs, you may want to go with the least costly option, such as a rooftop solar panel. If your goal is to meet corporate sustainability goals, then cost may not be your biggest priority.
Before selecting a commercial solar financing plan, you might have some practical concerns about whether or not your organization meets the requirements for solar energy. In general, you need:
- Quality roofing
- Sufficient sunlight
- Solid exposure
Compass Solar Energy will conduct an evaluation of the roof to determine its stability and let you know if you need to undergo re-roofing before solar panel installation. A solar canopy or ground mount might be recommended.
Compass Solar Energy will also let you know if your solar panels will have enough access to sunlight, which will influence the type of inverter that is used. A south-facing roof is ideal for exposure, but east and west-facing roofs also work.
How Compass Solar Energy Works
Compass Solar Energy provides financing for commercial, non-profit and government entities. There is no set rate; each project is handled individually and evaluated based on factors such as size and financial history. Each business qualifies for different financing companies.
Typically, organizations have two options when it comes to commercial solar financing with Compass Solar Energy. The first is to finance the entire project, which involves including the current tax credit to be credited to the total project price or through monthly payments. In other words, you could be paying negative interest on the project.
If you choose not to finance with the company, it will be a longer-term project. These cases generally involve a 7-10 year term with financing based on the financial history of your organization and come with a 7%-14% interest rate. However, you can use the current tax credit on your own taxes and depreciation over the five years following the installation.
Your Commercial Solar Financing Plan
To sum up your options, you can either take a negative project price but surrender your organization’s tax credit and depreciation, or you can pay a standard interest rate and keep the tax credit and depreciation. Whatever your organization’s needs are, Compass Solar Energy can help decide the best commercial solar financing plan for you!