Financing Typeopen this in its own window
Please indicate the type of financing mechanism for the proposed solar system.
Please note that not all financing types are available within all states or utility territories. For additional information on solar financing, explore SEIA’s Third Party Financing Overview or the Clean Energy States Alliance Financing Overview. This calculator is able to simulate the following financing types:
Direct ownership: Institutions, municipalities, foundations, endowments, and non-profits, and commercial enterprise can purchase their solar systems using cash. In this case, they are eligible to receive 100% of the electricity savings, all available rebates and incentives, and can claim greenhouse gas emission reductions for the system.
Debt Financing: Debt Financing uses debt to enable entities to purchase a solar system outright and enjoy all the benefits of solar directly; however, some of the initial capital cost is offset by borrowing money in exchange for long term payments. A wide variety of loan or bond offerings are available with different monthly payment amounts, interest rates, lengths, credit requirements, and security mechanisms.
Power Purchase Agreement: In a Power Purchase Agreement (PPA), entities enter into an agreement to purchase electricity from a third party investor who owns and operates the solar installation. The investor is responsible for all operations and risks of the system for a term between 15-25 years. Usually, the PPA rate paid by the customer is less than the current electricity cost ($/kWh).
Operating Lease: The Operating Lease is a third-party-owned financing structure for taxable entities where the investor leases the equipment to the customer. The customer pays scheduled lease payments to the investor for 7-10 years, after which the system is bought out at fair market value.