Lockwood Solar offers a wide range of funding options to meet both your individual system and financing requirements. If you afford your current electric bill, you can afford solar. Here’s how:
Property Assessed Clean Energy (PACE):
PACE plans provide buyers with a simple and effective option for financing energy efficiency and renewable energy improvement, including commercial and residential solar systems. With PACE, state and local governments fund the upfront costs of the system, which are paid back by the owner over time (10 to 25 years) through a property tax assessment. The key advantage to PACE financing is that the debt is assessed on the property itself, not the property owner, and can be transferred to a new owner with the sale of the property. Other benefits include:
- Quick approval with no credit check required.
- Customer ownership of the system.
- In some cases, energy savings exceed loan payment costs immediately.
- Tax incentives up to 74% available.
Power Purchase Agreement (PPA):
PPA’s offer a simple, low-cost and maintenance-free option to commercial and residential solar customers. With a PPA, a third party pays for the equipment and installation, and retains ownership of the system for the term of the lease. The customer purchases the power generated by the system from the third party and an agreed-to rate. A popular choice for tax-exempt organizations or businesses with little tax appetite. PPA benefits include:
- No upfront costs to the lessee in most cases.
- No maintenance costs to customer during the lease period.
- Lease is transferrable if property is sold.
- 10% to 30% savings over electric utility costs.
Loan Financing:
A good choice for businesses and individuals with a substantial tax appetite. Loan financing through a lender of you your choice offers energy cost stability and long-term returns on investment. Benefits include:
- Ownership of the system.
- Financing through the customer’s preferred bank or other lender.
- Tax incentives up to 74% available.
- Low interest rates and flexible terms.
Cash
Let’s not forget cash. A cash purchase provides the same tax, cost stability and investment advantages as loan financing without the need to find and qualify for a loan. Other benefits:
- Ownership of the system.
- No time wasted waiting for loan approval.
- Tax incentives up to 74% available.
Federal Investment Tax Credits:
The Solar Investment Tax Credit (ITC) allows solar system owners to deduct 30% of the cost of purchase of equipment and installation of their system from their federal taxes. Eligibility for the ITC rests with the owner of the commercial solar system, regardless of who consumes the electricity it produces. As a credit, the ITC allows system owners to take the credit amount directly off their tax payment instead of as a deduction on taxable income.
The 30% credit is currently available for systems under construction on or before the end of 2019. The credit steps down incrementally after that, dropping to 10% for commercial owners and zero for residential owners at the end of 2021.
Depreciation
Under the federal government’s Modified Accelerated Cost Recovery System (MACRS), businesses can depreciate 85% of qualifying commercial solar equipment an accelerated rate over a 5-year period. A larger portion of the overall deduction is taken out in the first two years, a major benefit to owners. System owners may also qualify for a bonus depreciation schedule that allows for 50% of the qualifying basis to be deducted in the first year for systems put into service before January 1, 2018, 40% for systems put into service during 2018, and 30% for systems put into service during 2019.
Reduced Sales Tax for Agriculture: California offers a partial sales and use tax exemption for the purchase of farm equipment and machinery used for qualifying activities, and that includes solar energy systems.
