Best Way to Finance a Commercial Solar Energy Project

Many industries have discovered the benefits of installing solar systems to save energy while protecting our unstable environment. Solar energy is used by residential buildings, businesses, schools, water districts, state and city customers, and businesses for commercial real estate, utilities and more. 

Because switching to solar energy is a major capital investment for most companies, it's important to choose financing tools that will help your company maximize incentives and discounts while protecting resources and managing risk. 

A power purchase agreement (PPA) and integrated financing are some of the best ways to do this. So let’s talk about whats a power purchase agreement is?

Power Purchase Agreement (PPA) is a contract that establishes requirements for the sale of electricity between the buyer and seller. They can last between five and 20 years and, depending on the location of the project and the type of PPA, are subject to state and federal level regulations.

In the case of solar energy, PPA providers bear the costs associated with the project such as construction, planning, maintenance costs and operating and much more. Customers can monitor their electricity bills immediately when they buy clean energy to replace network power. 

The provider receives all discounts and tax incentives related to clean energy generation. However, this savings is passed on to customers in the form of reduced bills.