October 8, 2015 | By RGR Marketing Blog

Where Does the Financing Come From for Large-Scale Solar Projects?

There’s plenty of profit to be made in the residential solar market. After all, U.S. citizens are going solar in record numbers, and residential solar energy’s momentum isn’t showing any signs of slowing down.

But the really big solar projects are in the commercial sector, and as luck would have it, commercial solar installations are on the rise as well. Big businesses know that going solar is a great way to cut costs, to help insure a better tomorrow, and to boost their environmental credibility among concerned consumers.

Of course, whether you’re installing a large solar array on a factory rooftop or a solar farm in the desert, you’ll need financial backing to get the project underway. If you’re installing solar for a lessee, then you’ll recoup your initial investment, but that will take time, and you’ll have to cover the costs of solar equipment and labor to get the job done.

Where can solar installers turn for financing for big solar projects?

Banks Are Lending to Solar Installers

Following the financial crisis of 2008, banks were hesitant to loan money to anyone, solar installers included. But now that the market has smoothed out, many financial institutions are finding the commercial solar industry offers an attractive and stable ROI.

Some banks even have specialized departments geared specifically toward financing green energy projects.

Let’s Make a Deal

Of course, finding a long-term financial partner willing to fund huge solar projects isn’t always as simple as walking into your local bank. You have to network to find a financing partner for your solar business.

Solar business owners should expect to spend some time getting to know potential financiers. It’s important to note that patience is a virtue in these situations, and that the legal costs associated with ironing out a business arrangement can be considerable.

Creating an In-House Fund for Solar

Solar businesses that offer power purchase agreements can find themselves in a difficult spot. On one hand, they have to offer competitive PPA rates, but on the other hand, they have to assume much of the risk when borrowing from a financing company.

In order to overcome these challenges, some solar companies have created in-house funds that allow them to remain competitive. The construction capital typically comes from a finance partner, and tax equity investors may be called in to provide tax equity.

By establishing their own funds, solar businesses are able to close deals more quickly and stay ahead of the competition.

For qualified solar businesses, financiers may create fast-track lending programs that allow creditworthy customers to speed up the application and financing process. In commercial solar, time is of the essence, so being able to quickly secure financing for eager commercial clients is certainly beneficial to solar installers.

And if you're a solar installer but you're finding that your leads are a bit light this time of year, turn to RGR Marketing. We offer the highest quality exclusive solar leads for sale in the business.

[Photo Via: KDCSolar]

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