Commercial Solar Lease uses the Investment Tax Credit to reduce financing costs
Helio Micro Utility, the leading independent energy advisory serving solar developers, EPCs and electrical contractors, is unveiling a ITC-friendly commercial solar lease – a simple operating lease that uses tax benefits to reduce payments.
Finally – Commecial Solar Lease makes small solar affordable
Our Commercial Solar Lease provides a much needed alternative for financing smaller commercial solar projects sized 10kW to $10 million. Helio Micro Utility structures plenty of Power Purchase Agreements, but smaller projects can’t support the PPA’s transaction and ownership costs. PACE and other financing forms can be expensive and strand the tax benefits. The Helio Commercial Solar Lease puts a tax equity investor behind a simple operating lease structure to minimize costs and deliver 100% project financing for about 85% of the project’s purchase price. Energy consumers get a fast-path to ownership, the solar installer gets a fair margin and Helio Micro Utility can provide a development fee to our project origination partners. Everyone wins.
Commercial Solar Lease Benefits
Helio’s commercial Commercial Solar Lease customers benefit from:
- A reduction in the EPC payment price and negative effective interest rates
- Significantly increased cash flows
- Protection from utility price inflation and volatility
- Lower operating expenses and increased property valuation
- Retention of SRECs and the environmental attributes of solar
- A fast, financed path to ownership
Lease terms range from 5 to 7 years, and end-of-term residual values may also be financed and depreciated. Eligible solar energy off-takers must be for-profit entities with solid financials.
Leasing for Energy Storage?
Director of Project Finance Tom Selden expects to launch a similar leasing product for Energy Storage soon. “If the Energy Storage Tax Incentive and Deployment Act passes, our Commercial Storage Lease will be the killer financing app. And even if it doesn’t, we expect to address underwriter concerns and deliver economic financing in high demand charge territories like SDG&E and Southern California Edison.”
For more information, contact Tom Selden, Director of Project Finance.