Each project will provide a unique return on investment (ROI.) The four biggest drivers of a project’s ROI are:
- Utility Electric Rate- The higher the existing cost of electricity, the higher the solar ROI.
- Investment Tax Credit (ITC)- Federal tax credit of 30% of project cost.
- MACRS depreciation- Accelerated cost recovery
- Debt Financing / Leverage. Bank financing increases return on equity (cash-on-cash).
SunPeak can arrange a variety of financing structures to suit your specific circumstances and needs:
- Cash. Customer pays cash for their system.
- Solar Loan. Customer borrows a portion, or all, of the required capital. Solar Cash ROI vs. Solar Loan ROI Explained
- Power Purchase Agreement (PPA). A third-party investor finances and owns the system, and sells electricity to the customer over a PPA term at a preset energy rate ($/kWh). Solar PPA Model Explained
Additional Financial Incentives Available: Every state has its own renewable energy incentives in addition to the federal incentives. For more information visit the Database of State Incentives for Renewables & Efficiency®
To help you decide which financing option is best for your organization, download a decision aid.