Louth Callan Renewables has significant experience financing U.S. solar projects, from mid-commercial to utility scale.
The right financing strategy and approach are crucial to realizing the full value or energy savings of any solar project. Louth Callan Renewables makes it easy. We work with a network of partners to provide each client with a financing solution that meets their specific needs. We offer a range of approaches for the following sectors:
Interested in your options?
Cash Purchase – If you have the cash and like to keep it simple, then a cash purchase option can create incredible returns. A well designed solar facility will generate enough savings to break even in 2-4 years, and if well maintained, operated and cleaned regularly, it will generate green energy and savings for multiple generations.
PACE Loan – Property Assessed Clean Energy Financing (PACE) may be a good fit if you have weak credit, for those who might potentially relocate and for those who prefer a financing term more in line with the solar asset’s life. PACE programs place the solar investment payments on your tax bill over 15 to 25 years. A PACE loan is non recourse financing that uses the value of the building as collateral. In this case your credit is not an issue, and in the event of business relocation the solar project and its financing stay with the property, along with the energy savings benefit and any utility incentives. PACE is not available in all jurisdictions and tends to be more expensive than alternatives.
Operating Lease – An operating lease offers the solar consumer (lessee), a flexible vehicle of financing which allows use of the solar asset with less risk, because the consumer does not initially have ownership rights. However, the term for an operating lease (normally 5-7 years) is often shorter than a capital lease. This means that the lessee more rapidly reaches system ownership status while reducing capital requirements. The finance provider (lessor) typically monetizes some of the incentives to pay down interest rates. These leases can allow either party to retain rights to the solar incentives.
Bank Loan –Today’s bank loans offer a simple, inexpensive financing option for up to 80% of the solar asset. Loans are often a fit if you have good-credit and pay substantial taxes but lack cash. In some situations, a low cost, longer-term loan may be a better option for nonprofits or others who want the tax benefits of solar. In any case, your existing bank should be the first stop as other lenders will need to subordinate liens to existing creditors.
Capital Lease – A capital lease is a good option to cover 100% financing over the term of your solar solution without upfront costs. Since the lessee shoulders the risks, it reaps all the ownership rewards. These incentives include the Investment Tax Credit (ITC) – 30% in 2019, the accelerated depreciation, and the interest expense deduction on the financing. Normally, at the end of a capital lease, solar system ownership is transferred to the lessee for one dollar.
PPA (Power Purchase Agreement)– With a PPA, the energy consumer agrees to be connected to a solar system owned by a third party or private investor and buys discounted energy. In turn, the energy consumer reduces their existing electric utility consumption and enjoys dramatic savings. While many private companies use PPAs, they are a perfect option for government and nonprofit entities, because there is no upfront expense and the typical term (up to 25 years) provides more stable energy costs for future budget planning. The third party owner uses the solar solution incentives to pay for any construction and ongoing operation of the solar facility.