Solar carports are becoming increasingly attractive to many businesses and public bodies during this time of energy market turmoil.
But despite their desirability, one of the biggest challenges businesses and other organisations come across is how to finance them.
Yet there are many affordable options available to help you save money on bills but also cut your carbon footprint as we head towards net zero in 2050.
Payment upfront
If your company or organisation has access to cash reserves to pay upfront for a solar carport then there are obvious benefits including a faster return on investment and not paying any interest.
Another way to finance a solar carport is to borrow the money from banks providing green loans to businesses. British Business Banks, the development bank of the UK, provides guidance and a list of all the banks offering green loans.
However, because of the way tax relief works, your total tax relief on paying for a carport upfront will be less than if you leased the solar carport.
Leasing
Many companies opt to lease solar carports from a company at a fixed price over a set number of years.
Benefits include keeping cash within the business and knowing how much you will have to pay monthly or quarterly which, because of solar energy’s green credentials, carry 100 per cent tax relief.
You will also pay less corporation tax via a leasing scheme than paying up front for the solar carport.
What's the difference between operating leases, finance leases and hire purchase?
Operating leases, finance leases and hire purchase are three types of lease agreements available.
Operating leases sees the company makes regular rental payments for using the solar carport but doesn’t take ownership of the asset.
With finance leases, you make regular payments to use to the solar carport and assume responsibility for it with the intention of eventually owning it at the end of the agreement. The payments will not only reflect the cost of owning the solar carport but you will also repay the principal amount of the lease, similar to a loan.
Like finance leases, hire purchase sees you making regular payments for the solar carport with the intention of owning it at the end of the payment scheme.
How do you calculate lease payments?
Solspan works with a company called Tower Leasing who has been operating since 1989 and provides finance options to our customers to make acquiring a solar carport affordable and tax efficient.
The first stage is to agree costs and we then work with you and Tower Leasing to an agree on a monthly or quarterly payment plan over a timescale that suits you. The average time is usually around three years.
Our customers find that cost savings can significantly offset or completely cover the cost of repayments. Once the contract terms are agreed, we can begin the process of installation.
Power Purchase Agreements (PPAs)
There has been a growing interest among companies and organisations to fund solar energy via PPAs.
These are agreements made with a solar panel company or a group of investors who provide the funding for the solar carport but remain as owners of the structure and are responsible for maintenance.
This means a company or organisation will have access to cheap energy produced by solar carports on your premises with the remainder being sold onto the National Grid.
A PPA provides a great opportunity for businesses and organisations to produce and buy cheaper green energy thereby increasing sustainability, reducing your carbon footprint and slashing your energy bills.
Contact us to discuss financing for your solar carport installation today.
