Financing Options

As you investigate whether solar is the right fit for your business, it is imperative to educate yourself on the commercial solar financing options available.

Self-financed

Typical buyers include for-profit commercial entities with adequate cash on hand to self-finance their solar investment, as the upfront cost is the full project price. Typical IRRs (internal rate of return) are in the 15-30% range, with a payback of 3-5 years.  

Commercial Loan

Typical buyers include for-profit commercial entities who wish to finance their solar investment. There is no upfront cost required, though a downpayment will reduce the loan term and/or payments, and a typical loan term duration is 5-10 years, during which time monthly payments are fixed. The interest portion of loan repayment is eligible for financing deductions. IRRs (internal rate of return) vary by system, but you can expect to be cash-flow positive from year 1 onward.

Benefits of owning your solar system through self-financing or a commercial loan include:

  • 30% Investment Tax Credit (ITC) goes to you
  • 6-year accelerated depreciation (MACRS) goes to you
  • SREC revenue goes to you

Power Purchase Agreement (PPA)

Typical buyers include non-profit organizations and houses of worship. There is no upfront cost required, though a downpayment will reduce the energy purchase rate of the PPA. A typical PPA term duration is 15-20 years, during which time there is an annual escalator of 0-2% and monthly payments are variable based on monthly solar generation. This option offers buyout financing after 3-5 years and the option for system removal or buyout at the end of the PPA term. There a mandatory buyout at the end of the operating lease term, where you would pay the greater of FMV or 15% of original lease value. IRRs (internal rate of return) vary by system, but you can expect to be cash-flow positive from year 1 onward.

Operating Lease

Typical buyers include for-profit commercial entities who are unable to take advantage of solar tax incentives. There is no upfront cost and a typical lease term duration is 7 years, during which time there is no annual escalator and monthly payments are fixed. Lease payments are fully deductible as is the interest on buyout financing. This option offers buyout financing after 3 years and requires a mandatory buyout at the end of the operating lease term, where you would pay the greater of FMV or 15% of original lease value. IRRs (internal rate of return) vary by system, but you can expect to be cash-flow positive from year 1 onward.

Capital Lease

Typical buyers include for-profit commercial entities who are unable to take advantage of solar tax incentives. There is no upfront cost and a typical lease term duration is 7 years, during which time there is no annual escalator and monthly payments are fixed, and the interest portion of lease repayment is eligible for financing deductions. IRRs (internal rate of return) vary by system, but you can expect to be cash-flow positive from year 1 onward.

Our Process

Our precision process includes feasibility, finance, design, construction, commissioning and operation:

Educate

Analyze

Design

Build

No-Cost Solar Analysis

Have SunBug Solar do a no-cost assessment of your business.  We'll do a complete analysis, factoring in the specifics of your site, the available state and federal incentives, projected energy savings, and financing options. Just fill out this simple form.

SunBug Solar

Let’s Talk!

Call 617-500-3938

Toll Free 866-945-1727

info@sunbugsolar.com

Founded in 2009, SunBug Solar has designed and installed over 1,000 solar systems all across Massachusetts, ranging in size from 1kW to over 500kW. We deliver the highest-quality solar solutions in conjunction with the best possible customer experience. Our integrated approach—from initial education through consultative design to quality installation and ongoing support—has earned SunBug the highest reputation for customer service, and a host of satisfied residential and commercial customers.