Solar Demonstration Center
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Investing in Solar Electricity Production
The SDC offers the solar power investor options to “buy into” a solar electricity generation system for almost any investment dollar amount. They do not have to have the system on their own property and do not have to build, operate, maintain or negotiate with the utilities for the sale of their production.
What equipment to utilize represents only part of the decision process in a photovoltaic solar system acquisition process. Other decisions, such as when to proceed and whether to buy or lease, can be equally important.
Money to purchase assets is often scarce, even for the biggest investors. A site to place the system is problematical as all locations and sites are not suitable for solar applications. As a result, equipment acquisition is often delayed well past the time it is needed or never happens.
The SDC offers leasing, and conditional sales contracts, as well as trade financing options for our photovoltaic solar systems and related equipment. In addition, SDC will locate, build, operate and maintain the system in a very productive location, offer security for the equipment and the best environmental adaptive installation. Financing is available for the photovoltaic solar system plant. It is a turnkey powerplant.
Some of the reasons for considering lease financing:
Lease financing can help the solar investor obtain equipment when needed as opposed to have to fund it all up front with a capital plan.
Leasing provides an alternative source of financing. The investor maintains their existing lines of credit for other business or investment purposes.
Leasing can be structured as "off-balance sheet". This can help preserve and strengthen the investor’s financial ratios.
Leasing offers a hedge against inflation. The solar investor gets the benefit of the equipment today but pays for the use with tomorrow's earnings.
Leasing conserves working capital. Payment for the use of the equipment is spread over the term of the lease.
Applicable sales tax on equipment is paid over the life of the payment structure rather than all up front.
Other tax advantages of investing in solar systems that are located in an State Enterprise Zone that offers state tax incentives.
Lease payments may provide a tax-deductible business expense, produce tax credits and with depreciation reducing tax liabilities.
The high residual value the solar system power plant and our financing options can result in lower lease payments over the term of the lease.
Leasing eliminates the disposal problems for the user at the end of the finance lease term as the plant remains in place at the SDC facility.
Some Questions To Help Determine if a solar power system investment is a good option.
Are your investment options reduced because of lack of capital budget funds?
Do you have capital tied up in other investments that are not paying you what you hoped they would?
Do you have a preference for on or off balance sheet financing?
SDC provides the following lease products:
Finance Lease
In this type of lease structure, the total of all payments represents the full value of the equipment. The lessee usually has the end-of-lease option to purchase the equipment for $1.00, a percentage of the original equipment price, or a specified dollar amount.
Operating Lease
The lessor retains ownership of the equipment but takes a substantial residual position, thereby lowering the lessee's monthly rental payments. Operating leases may qualify as "off-balance sheet" financing for the lessee. The lessee usually has the option to purchase the equipment for fair market value at the end of the lease term.
Synthetic Lease
A lease structured to qualify as an operating lease for financial reporting purposes, however, the lessee is considered the tax owner of the equipment. In certain applications, this structure can allow the lessee to obtain off-balance sheet book status but claim accelerated depreciation benefits for tax purposes.
Municipal Lease
This is a type of lease available to municipalities, state and local government entities at low interest rates.
Federal Government Lease
Leasing to U.S. Federal Government entities. This product is similar to leases offered to commercial customers with a few exceptions. Further, Federal Government leases are structured as either true leases or cononal sales contracts for tax purposes, and as either operating leases or capital leases for accounting purposes.
Full Service Lease
Through this contract, SDC will provide turnkey installation of a solar plant consistent with your operating requirements, provide lease financing, and operate and maintain the equipment for the contract term.
For further information:
If you would like to discuss lease-financing options for your project, please contact us:
Solar Demonstration Center
Troy Hightower
e-mail info@solardemocenter.com
(661) 342-1068