Commercial solar power is one of the fastest-growing sectors for the solar industry in Australia, with more and more businesses turning to solar photovoltaic (PV) technology to insulate themselves against rising electricity prices. Currently, commercial solar PV installations account for under 10% of the total market in Australia, but the introduction of innovative financing mechanisms for commercial-scale projects–largely absent from the industry–could send installations numbers skyrocketing. Financing is the next frontier for commercial solar power.
RenewEconomy’s Giles Parkinson touched on the topic in a discussion about Denmark firm Photon Energy’s plans to introduce its own financing product into the Australian market. Photon believes that the extension of financing packages such as solar leasing & power purchase agreements (now primarily in place for residential installations) to the commercial sector could result in the expansion the market to 500 megawatts (MW) per year.
In an effort to unlock more opportunities for this part of the solar industry, Solar Choice’s commercial wing has similarly been working diligently on providing its own leasing facilities for commercial clients. Since 2011, Solar Choice has been offering an operating/operational lease package through CAFGA with attendant potential tax benefits for clients under this arrangement. CAFGA have been providing asset finance for over 30 years.
Solar Choice, in partnership with CAFGA, is now offering a separate financing package in addition to the operating lease package for clients with exceptional financial credit. Under this new arrangement, credit-worthy clients will have a 14 year term with indicative effective cost of power from their array as low as 6 to 7c/kWh for the first 7 years under a finance lease, and 12-14c/kWh for the next 7yrs under an operating lease, and less than 2c thereafter. The financing will have little sensitivity to interest rate rises up to 4.5% above today’s rates.
The exact details of the arrangement are to be discussed between CAFGA and the client. Please contact Solar Choice Managing Director Angus Gemmell to learn more: angus@solarchoice.net.au
© 2013 Solar Choice Pty Ltd
