i am your guide to solar finance for business

Energy savings and resource efficiency

Business

Finance options

There are a variety of finance options now available for solar. These range from asset finance to newer products such as power purchase agreements. There is still the option of purchasing outright.

  Outright Purchase Loan Operating Lease (renting) Finance Lease (Capital Lease) Chattel Mortgage Power Purchase Agreement
Tax deductions Depreciation Interest + Depreciation All Costs Interest + Depreciation Interest + Depreciation All Costs
Payment Details N/A Variable Interest Rate Fixed Fixed fixed Varies with energy rate and system production
Contract length 0 years 1-5 years 3-10 years 3-10 years 3-10 years 10-20 years
Cost of finance <$100K system N/A 8% to 16% pa 8% to 16% pa 8% to 16% pa 8% to 16% pa 18 to 25 c/kWh
Cost of finance >$100K system N/A 5% to 10% pa 5% to 10% pa 5% to 10% pa 5% to 10%pa 16 to 20 c/kWh
  Tax deductions Variation in payment Contract length Cost of finance <$100K system Cost of finance >$100K system
Outright Purchase Depreciation N/A 0 N/A N/A
Loan Interest + Depreciation Variable Interest Rate 1 to 5 years 8% to 16% pa 5% to 10% pa
Operating Lease (renting) All Costs Fixed 3 to 10 years 8% to 16% pa 5% to 10% pa
Finance Lease (Capital Lease) Interest + Depreciation Fixed 3 to 10 years 8% to 16% pa 5% to 10%pa
Chattel Mortgage Interest + Depreciation Fixed 3 to 10 years 8% to 16% pa 5% to 10%pa
Power Purchase Agreement (PPA) - production All Costs Varies with energy rate and system production 10 to 20 years 18 to 25 c/kwh 16 to 20 c/kWh

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Page last updated: 29 January 2016