Commercial Solar Leasing
Transitioning to solar power has become an increasingly appealing option for commercial enterprises as solar energy costs have fallen dramatically over the last decade. However, the substantial upfront investment required to purchase and install a solar system can deter many small and mid-sized businesses from adopting onsite solar generation. This is where commercial solar leasing comes in – by eliminating the high initial capital costs and providing immediate access to the myriad benefits of these commercial solar energy systems.
Commercial solar leasing enables organizations to host solar panels on their properties with no money down. The approach translates to guaranteed energy cost savings and environmental impact reduction without capital expenditure. Commercial solar project leasing is the perfect solution for companies wanting to go green while adding to their bottom line.
At Sunwest Bank, we’ve established ourselves as leaders in the solar financing sector, leveraging years of expertise to offer tailored solar solutions for your business. Our deep understanding of the financial and energy landscapes ensures businesses can trust us to guide them seamlessly through their solar transition, maximizing benefits while minimizing risks.
The Benefits of Commercial Solar Leasing
No Upfront Capital Investment
The primary benefit of solar leasing is zero down payment requirements. The leasing company provides the financing for all equipment, labor, permits, and other upfront costs.
Predictable Monthly Payments
Solar leases offer fixed monthly payments for system usage. This provides consistent pricing, not subject to utility rate volatility.
Access to Tax Credits and Incentives
Since they own the solar system, the leasing company can utilize tax credits like the 30% federal Investment Tax Credit (ITC) and pass those savings through via reduced lease rates.
Offset Electricity Purchases
The solar energy produced from the leased panels greatly reduces a business’s purchases of utility-supplied electricity. Solar leasing provides immediate energy cost savings.
System Maintenance Included
All monitoring, maintenance, repairs, and insurance obligations are handled by the system owner or leasing company, which allows your company to avoid unexpected costs.
Flexible Contract Terms
Lease payment models, rates, system sizes, and end-of-term options can be customized based on a business’s budget, goals, and growth projections.
Low-Risk Proposition
The minimal upfront investment and included maintenance make leasing a low-risk approach to adopting renewable energy.
Solar leasing democratizes access to commercial solar solutions by eliminating traditional barriers to commercial solar finance, like high capital costs, system ownership burdens, and operations and maintenance challenges.
Key Considerations for Businesses Exploring Solar Leasing
Tax Credit Considerations
Since the leasing company owns the solar power system, the leasing provider receives applicable tax credits and incentives. If maximizing tax benefits is a priority, direct solar purchase may be preferable.
System Usage Rights
The business does not own the solar equipment and must make lease payments for the duration of the operating lease and the contract term to use the system. Purchasing the system provides unencumbered access. The business saves money each year and has the capacity to guarantee the payments.
Contract Terms
It’s critical to fully examine the terms of any such commercial solar loan or lease agreement, focusing on payment amount, escalations, operations, insurance, etc.
Payment Escalation Clauses
While most solar leases have fixed annual payment escalations built in, some providers offer variable rate structures tied to system production or energy prices. Understanding the rate model and potential increases is key.
Properly evaluating these aspects helps ensure a solar lease arrangement optimized for a particular commercial property and business situation.
Commercial Solar Leases Vs Other Commercial Solar Financing Options
Some other popular options for financing commercial solar projects include:
Solar Loans
Banks or credit unions provide financing for commercial solar system installations, which is repaid through fixed monthly principal and interest payments over a defined loan term. This allows the business to own the solar system and take advantage of tax incentives.
Direct Purchase
Organizations can buy their solar energy systems with existing capital resources, gaining full ownership. This requires a large upfront investment but provides the most long-term savings.
Solar Power Purchase Agreements (PPAs)
A solar power purchase agreement allows solar electricity to be purchased directly from a developer at a defined per kWh rate. The business does not own the equipment.
Commercial PACE
Property Assessed Clean Energy programs provide financing for renewable energy projects tied to property tax assessments.
The ideal solar financing strategy depends on a company’s specific tax situation, capital position, and ownership preferences.
Why Choose Sunwest’s Commercial Solar Leasing Program?
As one of the country’s leading renewable energy financing firms with over $1 billion in solar projects delivered, our commercial solar financing and leasing program provides an accessible path for businesses to adopt solar simply and cost-effectively.
Proven Solar Experience
For over a decade, we’ve engineered, constructed, and financed hundreds of commercial and utility-scale solar installations up to 30 MW, totaling more than 1 GW of clean energy.
Turnkey Process
We handle everything related to your solar project, from permitting and design to long-term maintenance, providing a simple transition to solar.
Very Competitive Rates
Our considerable purchasing power and strong capital position enable us to offer affordable pricing on our solar lease agreements.
Right-sized Systems
We can configure solar systems from just a few kW to multiple MW to match any business’s energy consumption profile and goals.
Solar-Only Focus
Our exclusive solar energy focus translates to unmatched technical expertise that allows us to cater solar energy projects to each customer’s unique property situation, energy needs, and financial objectives.
Maximum Incentives
Our team optimizes federal tax credits like the ITC, all tax incentives, and available state and utility incentives to maximize ROI.
Discover how our solar leasing program provides businesses with an accessible, low-cost solution to start benefiting from solar right away. Contact us today to explore leasing and solar financing options tailored for your organization. We look forward to helping your company unlock the power of the sun for a greener future.
