Solar Leasing and Solar Energy Procurement Agreements
As the demand for clean energy has grown, so has the financing options available to consumers. Some customers choose to finance the investment with cash or a traditional loan; but within our North Carolina and Georgia markets, consumers have other options that are financially advantageous. Solar leasing and power purchasing agreements or Solar Energy Procurement Agreements (SEPAs) have become preferred financing mechanisms that allow businesses and nonprofits to have affordable access to clean energy with significantly reduced upfront costs as compared with a cash purchase.
Solar Energy Procurement Agreements for Georgia
The Solar Power Free-Market Financing Act of 2015, also known as House Bill 57, was signed and passed on May 12, 2015. This Act allows for third party ownership of solar in the state of Georgia. Solar Energy Procurement Agreements (SEPAs) are a long-term agreement which the customer agrees to purchase energy at a negotiated rate ($/kWh) for a specific term but does not take ownership of the solar system. This option allows an immediate reduction in their energy bill with expected increased savings over time as utility prices rise. All monitoring and maintenance is handled by the solar array owner. Contact us for further information.
Solar Leasing for North Carolina
Eagle Solar & Light is the first company approved by the North Carolina Utilities Commission to offer leasing and remains the only company to have active leases across Duke Energy territory with commercial and nonprofit entities. Leasing your solar array is a very simple process. With a lease term that can range from 5-25 years, and little money upfront, the system is installed by Eagle Solar & Light and maintained during the lease term. With an energy production guarantee, and a fair market value buy-out option at the end of the contract, it’s a win-win for those consumers looking for a clean energy solution. Given that this is an operational lease there is no requirement to purchase the system at the end of the term. This equipment, over the life of the lease and the equipment will deliver a quantifiable amount of clean kilowatt hours thereby reducing the amount of energy purchased from the utility. Therefore, the system saves money over the long-term and reduces the consumer’s carbon footprint. Because ESL will own the system, it monetizes the available tax benefits and indirectly shares some of these benefits back in the form of a lower lease payment. The benefit of the lease is that allows the consumer to have a positive cash flow much more quickly than a cash purchase; in other words, the utility savings the system generates exceeds the cost of the lease. While every situation is unique, we have seen many of our customers go cash flow positive in Year 1.
North Carolina offers an added solar incentive for residential, commercial and non-profit customers through the NC Solar Rebate program, but demand for those rebates in the commercial sector is exceedingly high*. Rebates aside, the leasing option gives consumers another financially attractive avenue to afford solar. If consumers do receive a rebate, the combination of the rebate with a lease can make solar even more affordable, as use of this combination by our nonprofit clients has shown.
* These rebates are exhausted within hours of each year’s rebate allotment becoming available. Note that the demand for rebates in the nonprofit sector is growing, but the non-profit rebates have not been fully utilized.