Corporate Solar Could Get Boost from Different Financing Models

Corporate Solar Could Get Boost from Different Financing Models

Corporations and individuals want to move from fossil fuels and towards sustainable energy like solar. The big drawback with solar is the up-front cost, which takes decades to realize a return on investment.

Currently the solar industry is telling corporate buyers to not only front the cost of equipment, but also operate to various degrees as a utility, managing the equipment and the power it creates. The problem is that business, like individuals, are set up and used to simply paying a monthly power bill. Companies basically just want to keep paying their monthly power bill, and they also want that expense to go down if possible.

One option may be more creative financing through a third party, says Matt Chaney, CEO of MMA Renewable Ventures. MMA is a San Francisco-based firm that aggregates sustainable energy projects and matches them to equity funding. A Power Purchase Agreement (PPA) sets up a situation where you have:

• a company that wants clean, affordable power without unpredictable price spikes (like conventional power today)
• manufacturers of solar panels, inverters, other equipment and maintenance service providers, and
• a third party that finances the purchase of equipment and then sells power to the site-host over a long-term contract period.

This is a not a simple process, as there are all sorts of credit, tax, and government issues that have to be resolved on a case-by-case basis. But if MMA can make it simple, then the result can be a strong business driver that few competitive companies can ignore—clean energy with no up-front costs.

Check out an article written by Matt Chaney by clicking here http://www.renewableenergyaccess.com/rea/news/story?id=48034&src=rss

Tuesday, May 1, 2007

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