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How to Pay for Solar

Businesses and nonprofit organizations have options when it comes to solar financing:

  • Purchase the system outright with cash
  • Finance the purchase with a loan
  • Have a third party buy the system and either lease the system from them or buy the power the solar system produces.

The right option depends on your tax liability, investment goals and available cash. For example, nonprofit organizations don’t pay federal income tax so thus can’t benefit from the tax credit. This makes the third-party ownership option a good one. A company with ample cash flow and high tax liability benefits most from a straight purchase or loan. A for-profit business with little tax liability often does well with an operating lease.

New England Clean Energy will help you evaluate the options and make your decision. We are “financing agnostic”. We have no skin in the financing game, so you can trust us to help you get the right option for you. If you choose to finance versus purchasing outright, we’ll connect you with reputable organizations to make the financing process easy.

What's the best way to pay for solar?

 CashLoanOperating Lease to OwnCapital LeasePower Purchase Agreement
Your Payment ResponsibilityPrice of the system upfrontMonthly payment (predictable amount)Monthly payment (predictable amount)Monthly payment (predictable amount)Value of all electricity produced (varies by month)
TermN/A3+ years7 years3+ yearsVaries
Beneficiary of Federal Tax Credit & DepreciationYouYouSystem Owner*YouSystem Owner
Recipient of Green IncomeYouYouYouYouVaries
* Although these benefits flow to the system owner, a good portion of their value is passed to you through reduced lease payments.

Will I qualify for financing?

  • Has your organization been in business for at least 3 years?
  • Is your business stable, with no prior bankruptcies?
  • Do you have stable revenue and profit?
  • Do you have enough cash flow to make monthly loan or lease payments?
  • Is your total debt to tangible net worth reasonable?
  • Are your references (credit reports, bank and trade references) positive?

If you answered “yes” to most or all of these questions, you are likely to qualify for financing.