Welcome to our

All Thing Solar Blog

COMMERCIAL SOLAR FINANCING

By James Kennedy, Founder and President Beach Cities Solar Consulting LLC

COMMERCIAL SOLAR FINANCING

There are three types of commercial solar financing options.  I will break down each option below:

PACE (Property Assessed Clean Energy) Loans: https://www.beachcitiessolarconsulting.com/pace-financing/ Loan is secured by the equity in the property, and does not affect the business’s existing credit lines.  Loan payments are made with property taxes, and entire financing amount may be tax deductible.  Loan is transferable to buyer in the event of a sale.  Not all jurisdictions allow PACE.  Business owns equipment and is eligible for 30% Federal tax credit and depreciation.

Equipment Loans: Loan is secured by the equipment, and does not affect the business’s existing credit lines.  Loan payments are made monthly, and interest may be tax deductible.  Loan must be paid off in the event of a sale.  Business owns equipment and is eligible for 30% Federal tax credit and depreciation.

PPA (Power Purchase Agreement): https://www.beachcitiessolarconsulting.com/solar-power-purchase-agreement/ Third party ownership model.  The business does not own the equipment, a third party investor does.  The business purchases solar energy from the investor at a reduced, fixed rate for the term of the PPA.  The Business is NOT eligible for 30% Federal tax credit and depreciation.

commercial solar financing

Depending on your needs Beach Cities Solar Consulting LLC can act as your broker to pair you with the best local provider based on the scope of work (carport, ground mount, roof mount, with or without battery storage, or a combination of all of the above) which includes a financing option above.  Keep in mind with the CPUC’s recent ruling on December 15th, 2022 all California businesses will have to have their applications for interconnection submitted to SDG&E, SCE, or PG&E by April 14th, 2023 in order to be grandfathered into the current net metering program (NEM 2.0): https://www.beachcitiessolarconsulting.com/california-solar-incentives-nem-3-0/.

The current net metering program allows California businesses the ability to use the grid as storage (except for when it goes down, there will be no electricity without battery storage or a generator in this case), selling excess energy produced during the day back to SDG&E, SCE, or PG&E to offset usage during the night.  Due to the decrease in net metering compensation rates with NEM 3.0 this will no longer “pencil out” for businesses and they will be forced to install battery storage to power their operations during the nights (and of course in grid outages) to make the numbers pencil out as a viable investment.  To avoid the expensive additional cost of battery storage (although we believe all businesses should have it regardless of cost) the single line diagram from the engineering plans must be submitted along with the interconnection application, so it is a safe bet that if you would like this completed by April 14th to have contracted by the end of February, at the latest, as all solar companies are experiencing record demand at the moment (and this will only increase as the NEM 3.0 deadline approaches).

BCSC LLC can broker your commercial solar project with financing (as different contractors specialize in different applications and some have full construction schedules through 2023, its best to use an expert in this capacity) or run a competitive request for commercial solar proposals with financing from thousands of qualified nationwide solar & storage providers.  Inquire today by calling 310-499-3658 or through the contact us button below!