Published on December 28th, 2013 | by Guest Contributor0
Solar Leasing For Small Commercial Solar Projects
December 28th, 2013 by Guest Contributor
By Yann Brandt
Residential and large commercial solar has grown by leaps and bounds by using third-party solar financing, such as the solar lease and power purchase agreement or ‘PPA.’ Within the residential sector, the sales process has been able to go from a time-consuming, one-off approach, to enabling a sales person to sell a solar lease within minutes. Lead generation platforms and customer acquisition techniques have utilized this streamlined process to sell quickly and to ultimately install several gigawatts of solar, one 5kW project at a time.
In residential solar, the transaction is mostly centered around a standard financing product that is based on local utility tariffs and potential solar savings. The lease product is calculated to generate immediate savings to a customer’s utility pricing with no upfront cost to the homeowner. For approval, a salesperson needs only a customer’s credit score to complete the sales process and begin the installation. Conveniently, pulling a credit score is very easy and can be done within seconds of having the homeowner’s authorization.
Imagine if selling a still relatively small, 150kW, commercial solar installation was this simple. Imagine if it were possible for a salesperson to approve a commercial customer for a no-money down solar lease within minutes of beginning the conversation. With PACE (Property Assessed Clean Energy), a quick credit approval process is now possible. PACE Lease® is a third-party ownership financing structure that allows a building owner to save money immediately by installing solar with no money down. This innovative financing structure is already available in a few markets and presents an immediate value proposition to business owners when installing solar on their commercial buildings.
With PACE Lease®, contractors that serve a PACE market and do commercial solar development can now access a special ‘Project Pricing Matrix’ that gives contractors the ability to gauge their desired installation price against a commercial property owner’s discount off of their utility costs. This Project Pricing Matrix, as offered by Demeter Power changes the solar professional’s development process for commercial solar from “What price per kWh can I offer?” instead to knowing “This is the target EPC price this project can support.” Selling small and medium commercial solar is getting easier with financial innovation like PACE Lease® that utilizes PACE as a credit enhancement in order to make small and medium commercial solar deals bankable like never before.
Demeter’s Project Pricing Matrix is initially offered for commercial solar projects in PG&E markets. To learn more please visit demeterpower.com.
About the Author: Yann Brandt is the Co-Founder and Vice President of Demeter Power Group. Demeter is a solar company and 2013 DOE SunShot Award winner that finances commercial solar projects for contractors in PACE markets across the United States. More information can be found on demeterpower.com.
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