The time has come for your business to transition to solar, but you might be asking yourself how a commercial solar PPA works? Do you finance your solar project through a bank or a third party lender? Don’t worry, we’ve got the answers below.
Your business can enjoy going solar with zero capital investment by structuring a solar project through a third party lender, which is also known as a Power Purchase Agreement (PPA). A PPA is just one of many solar financing options.
Instead of your business purchasing the solar panels and system outright, you can buy the energy that is generated from the system installed at your facility, which is primarily owned and financed by a separate financer or investor. At the end of your agreement, you will have the power to purchase the system from the financer or you can draft a new agreement and continue operating under a financing agreement.
It is important to note that there are a few things that come with purchasing your system from your financer after the terms of your agreement come to an end. You will have to find a solar professional who can maintain and troubleshoot your system when issues arise.
There are many benefits of choosing a commercial solar PPA when your organization decides to switch to renewable energy for its manufacturing operations. Here are just a few:
Unfortunately, there are disadvantages to solar PPAs that could turn you away from this idea. Here are a few:
When companies are looking to transition to solar for renewable energy, a commercial solar PPA is one of several options available. Now that you have a better understanding of how PPAs work, it is up to you to decide if this is the right move for your business.
For more information about how your company can benefit from a commercial solar PPA, contact AVANA Capital today. Here at AVANA Capital, we have been working with businesses just like yours to finance solar projects for more than five years. Our main goal is to provide you with a creative lending solution for your next clean energy project that stays within your budget and solves your unique problems. Our renewable energy initiatives not only create value for our company, our investors, our borrowers and the overall economy, but also creates value for future generations by providing them with clean renewable energy.