Next Generation Solar Financing

Posted on February 25, 2010. Filed under: News | Tags: , , , , , |

Despite the plummeting price of solar PV systems, cost remains an issue.  High upfront costs can prove prohibitive for many, even after subsidies and tax breaks.

Power Purchase Agreements (PPAs) have been around for several years – allowing customers to “lease” solar panels, thus benefiting from drawing their electricity needs from renewable solar power but without the associated costs of installing and maintaining the panels.  Under a PPA, the electricity provider secures funding for the project, maintains and monitors the energy production, and sells the electricity to the host at a contractual price for the term of the contract.  PPA terms generally last between 5 and 25 years.  The benefits of PPAs are real, but lessees do not enjoy the benefits of actually owning the panels.

But Renewable Funding, an Oakland CA based company, is leading the charge for Property Assessed Clean Energy, or PACE.  This program allows residents and businesses to borrow money to finance solar or long-term energy efficiency improvements and pay the money back over a span of years through a marginal increase in their property taxes.  In fact, San Francisco Mayor Gavin Newsom just passed a bill making $150 million available to residents and businesses in the city interested in pursuing PACE improvements.

By parking all related costs of such improvements into the borrowers property taxes, up-front financial barriers are eliminated.  Renewable Funding is hoping that the San Francisco initiative takes off and spurs similar programs across the country.


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3 Responses to “Next Generation Solar Financing”

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To start, allow me to point out that your internet site is fantastic. I love the theme that you have. It was very easy on the eyes. Appreciate your article too. Definitely subscribed to your feed to make sure I won’t be missing out on any updates. Excellent job! Toast to a productive business

This is a successful program getting renewable energy installed all over the country! Many cities are following the example set by this program. The great part – the cities will actually get their money back to reinvest in more PACE bonds.

[…] S 3642, solar | This summer, a storm has been brewing over Property Assessed Clean Energy (PACE) financing. This type of financing allows homeowners to finance solar installations or other clean energy […]

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