Financing

100% Financing

Optimize Cash Flow and get the best Return on Investment

CPACE

The Commercial Property Assessed Clean Energy (CPACE) program helps commercial business owners pay for solar and energy storage upgrades by providing 100% financing and long-term repayment options.

This program allows property owners to avoid draining working capital, all while giving them the flexibility to pay back the financing over a term that coincides with the life of the upgrades or incentive programs.

CPACE is a special assessment that attaches to the property where the improvements are being completed and is repaid on the same schedule as typical property taxes. Since the assessment attaches to the property itself, if the business owner were to sell the property, the assessment would remain on the property and the new owner would assume payments.

CPACE Financing Benefits

  • Allows building owners to better afford energy efficient upgrades on their commercial properties
  • CPACE assessment payments may be passed along to tenants as part of rent/rate.
  • The property assessment is attached to the property itself; there is no personal guarantee or business guarantee required as there would be with most loan structures
  • The interest portion of the tax assessment payment may be tax deductible*. *Please speak with your tax advisor
  • As a property assessment, it is categorized as off-balance sheet financing and therefore can be looked at as “equity” in the project or a mezzanine debt replacement
  • Higher bottom line or net income with energy savings
  • Long term repayment with CPACE, typically up to 20 years
  • No down payment is required (in most circumstances)
  • The property value should increase with energy upgrades

*CPACE is not available in every state.

Benefits

Solar ITC

Investment Tax Credit (ITC)

The federal government allows business owners to obtain a tax credit based on the total system cost. Depending on the year, credit can range from 30% to 10%. This credit can be carried back 1-year or carried forward for 20 years.

Depreciation

Depreciation

The federal government allows business owners to write off the total system cost, less 50% of the received ITC. Under BONUS depreciation the depreciation can be taken all in Year-1, or under MACRS, over the 5-year schedule.

Cash Incentives

Local Cash Incentives

Some states have cash payment and on-bill credit incentives to further reduce the costs of solar. SolBid will ensure that all Incentives, both federal and state, have been identified for each project and are provided in the financial analysis.

USDA Rural Energy for America Program (REAP)

For agricultural or businesses that are located in rural areas and meet the USDA Small Business classification

  • Loan guarantees on loans up to 75% of total eligible project costs; Max $25M
  • Grants for up to 25% of total eligible project costs; Max $500k
  • Combined grant and loan guaranteed funding up to 75% of total eligible project costs.

USDA

Other Options

Cash

Best option for any entity with the capital budget and the tax appetite to monetize the tax credits

  • Client pays total project cost upfront
  • Client receives all tax incentives
  • Client receives all local incentives applicable
  • Client receives all energy savings

Term Loan

Best option for any entity wanting to leverage short-term capital to remove the upfront capital burden

  • 5-10 year terms
  • Debt is tied to the business
  • Client receives all tax incentives
  • Client receives all applicable local incentives applicable
  • Client receives all energy savings

Operating Lease

Best option for a For-Profit entity with little to no tax appetite

  • 5-7 year lease terms
  • Debt is tied to the property via an property assessment
  • Bank receives all tax savings
  • Client receives all local incentives applicable
  • Client receives all energy savings

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