Financing Solar

DRI Energy endeavors to understand your business operations to assist implementation of a customized financial package that simplifies your conversion to solar generated electricity.  Our various financing solutions are designed to maximize your return on investment.

 

Today's falling module prices, utility rebates, the 30% federal grant or tax credit, along with accelerated depreciation schedules combine to make solar now more affordable than ever.  Solar projects frequently produce investment returns over 10%.  To maximize your return, our specialists will work with you to provide customized return on investment analysis and cash flow summaries.  We work with clients whose locations are spread across the country to identify projects and markets with highest returns on investment.

 

Need to use your funds elsewhere in your business?  DRI Energy can arrange full financing for your solar project with no upfront capital costs to create a positive cash flow from day one.  Financing options include:

 

Power Purchase Agreements are financial vehicles that enable customers to take advantage of the benefits of a solar energy source with no capital outlay.  A third party financial institution will own, operate, and maintain the solar power system for terms of 15-25 years.  Customers buy power at an agreed upon long-term rate, at or below market electricity rates with an agreed upon below-market escalator. 

 

For example, ACME currently purchases utility electricity at 14¢ per kWh; this rate has been increasing 4% annually.  DRI Energy can arrange for a partner PPA provider to sell solar electricity to ACME at 11.2¢ per kWh with a 3% escalator for the next 20 years.  ACME is cash flow positive in year one with zero capital outlay and increasing annual savings.

 

A solar lease agreement is structured so that monthly lease payments are lower than previous monthly utility electricity payments.  The payments are escalated annually at or below the current utility escalation.  The lease will include an option to purchase the solar power system at either the end of the lease term or at pre-negotiated intervals, typically 10 years.

 

For example, ACME currently pays $10,000 monthly for utility electricity, increasing 4% annually.  DRI Energy can arrange for a solar lease for $9,000 monthly for solar electricity, increasing 3.5% annually.  At the end of 10 years ACME has the option to purchase the solar system at market value.  Again, ACME is cash flow positive in year one with zero capital outlay and increasing annual savings.

 

California approved AB 811 legislation in 2008 giving most cities and counties the authority to offer low-interest loans to building owners, who then repay these loans through assessments that appear on their property tax bills over a typically 20 year period.  If the property is sold, the annual assessments become the responsibility of the new property owner.  To date, Berkeley, Palm Desert, and Sonoma County have established programs.  San Diego has plans to launch a program Fall 2009.  Other cities and counties are expected to follow suit; many are planning to use portions of their block grant funding from the American Recovery and Reinvestment Act (ARRA) while others plan to issue municipal bonds.  Interest rates vary by municipal program but are usually a fixed 7% interest rate.