Financing Options to Cover Initial Costs
In Oregon, businesses have the option to install solar electric through leasing or power purchase agreements. These generally have lower upfront costs than purchasing a solar system outright. In most cases, either purchasing with cash or through a loan makes the most financial sense in the long run. However, leasing or power purchase agreements might be right if your business wants to reduce the upfront cost of installing solar.
While the net cost of solar electric is reduced by incentives and tax credits, only the Energy Trust and other local utility incentives are paid up front. This leaves the business writing a substantial check to the contractor. If your business’s savings account isn’t quite up to the task, special equity lending programs are set up for renewable energy projects.
While not completely exhaustive, a list of solar lenders in Oregon and Washington can be accessed in the Northwest Lender Directory for Home Solar Projects. One of the most popular loan options for small businesses is Umpqua Bank’s GreenStreet program.
Some other financing opportunities:
- Rural Energy for America Program – (REAP) offers grants and/or loan guarantees for the purchase and installation of energy efficiency and renewable energy improvements. Assistance is limited to small businesses and farmers and ranchers. Projects must be located in a rural area. REAP grants and guarantees may be used individually or in combination. Together they may finance up to 75% of a project’s cost. Grants can never finance more than 25% of the project or $250,000, whichever is less.
- Renewable Energy Development (RED) Grants – The Business Energy Tax Credit Program began in 1979 to help Oregonians invest in energy conservation, renewable energy resources, rental weatherization and cleaner transportation fuels. In the 35 years of the program’s existence, BETC certified about 25,000 projects that helped save, displace or generate more than $1.6 billion in energy savings or new energy sources. Now, the Oregon Department of Energy administers business tax credits and grants through the Energy Incentives Program. RED grants are available through the Energy Incentive Program. Renewable energy production systems that produce energy using biomass, solar, geothermal, hydroelectric, wind, landfill gas, biogas or wave, tidal or ocean thermal energy technology may qualify for RED Grants. ODOE awards grants up to a maximum of $250,000 per project not to exceed 35 percent of eligible project costs.
- State Energy Loan Program – The purpose of the Energy Loan Program (also known as SELP) is to promote energy conservation and renewable energy resource development through low-interests loans. Individuals, businesses, schools, cities, counties, special districts, state and federal agencies, public corporations, cooperatives, tribes, and nonprofits may be eligible for the program if their projects:
- Save energy
- Produce energy from renewable resources such as water, wind, geothermal, solar, biomass, waste materials or waste heat
- Use recycled materials to create products
- Use alternative fuels
- Is primarily in Oregon
- Blue Sky Renewable Energy Community Project Funds – Blue Sky community project funding is available to help cover the capital costs of installing qualifying, new renewable energy systems for non-residential sites within the Pacific Power service area. Projects are identified and selected annually through a competitive evaluation process. Applications are accepted only during a defined application period, typically in the spring each year. Dollars available for awards are limited and awards can range from a few thousand dollars to more significant investments and may differ from the amount requested by the applicant.