Clean energy finance solutions
Capex is no longer a barrier to gaining the benefits of solar power for businesses across Australia.
As well as saving a significant amount of money that can be used towards other initiatives and improve your bottom line, the production of clean energy increases your green credentials which can attract potential customers.
Our exclusive partnerships with Australia’s leading financial institutions allow us to offer flexible finance options to suit any business’s needs. These options can be as simple as utilising savings from the introduction of solar power to pay off the system over a flexible term avoiding large upfront costs, purchasing upfront or simply leasing the system when you need it.
Lease your solar
Whether you’re a small business or large multi-national, owning your own system may not be the right decision. Businesses can lease a solar power system for a particular amount of time. The finance provider owns the asset and you can lease it from them for an agreed period, making fixed monthly repayments. A substantial benefit to leasing is the availability to deduct full payments for income tax purposes. At the end of the term you can choose whether to continue leasing and benefitting from clean energy, purchase the system or end your lease.
Finance to own
If leasing doesn’t fit your requirements, you can select finance to own the system immediately, known as a Chattel Mortgage. Making fixed monthly repayments, at the end of the term the clear title for the asset will be transferred to your business.
In many cases, the electricity cost savings generated by the solar system more than offset the repayments for the system, which mean you won’t be paying any more than you currently do and you have no upfront costs. Terms are generally 5-7 years, after which you will own the system outright and continue to generate significant savings.
In most circumstances, small businesses can also apply an immediate $20,000 upfront asset tax deduction on a solar power system.
Power purchase agreement
If your business doesn’t need to own the solar power system but wants to benefit from clean, cheaper energy then a Power Purchase Agreement (PPA) may be an option to consider.
A PPA or Power Purchase Agreement is where a separate company (also known as the PPA Provider) takes full ownership and maintenance of the solar system on your roof and you only purchase the electricity generated by the solar system from them. This is usually cheaper than what you’re currently paying from the grid. This means that there are no upfront capital costs, no technology, service or operational risks and you have an electricity price certainty for the life of your contract. You also get the benefits of having a commercial solar power system on your building as it can contribute to NABERS ratings, your site’s greenhouse gas emissions as well as the positive influence on your brand.
Solgen will install a customised system and you will only pay for the electricity produced. With no upfront costs and flexible arrangements, energy cost savings begin immediately.
Based on the size of your system, the government issues owners with certificates that can be traded as units of currency on the market. If the system installed is below 100kW you receive a number of Small-scale Technology Certificates (STCs) and if the system installed is above 100kW you receive Large-scale Generation Certificates (LGCs).
STCs are calculated based off the system location, overall electricity generation and installation year with all certificates given to the owner upfront as a one off at the time of installation for the life of the system. This means that all of these certificates can immediately be traded and can offset the initial cost of the system – much like a rebate, however this system will be phased out by 2030 with the amount of certificates issued on the decline from 2017.
LGCs are calculated based on the annual electricity generated and thus these certificates are given yearly. This means that larger systems provide an ongoing revenue stream for owners, but do not give an offset upfront against the price of the system.
Both STCs and LGCs act as units of currency and can be traded between companies. However, the value of these certificates do fluctuate based on the supply and demand in the market and each have a different value. Generally speaking each LGC certificate is worth more than an STC certificate.
If you have further questions about financing, government incentives or to find out how we can provide cost-effective, environmentally sustainable power for your business, contact us on 1300 660 704 or firstname.lastname@example.org