States with the greatest solar resources, such as Texas, California, Arizona, Hawaii and New Mexico, are the states in which solar PV is the most cost competitive. While those states make sense from a solar resource perspective, solar PV is also cost competitive in other places, including Massachusetts, New Jersey, New York, Pennsylvania and Connecticut. And although the solar resource is lower in the Northeast region of the country, those states typically have high costs of power from traditional providers. And there are lucrative financial incentives available through state legislation.
FAQ Category: Financials
What kind of financial incentives can I receive if I own the solar PV system?
Depending on where the system will be located, there can be numerous local and state tax incentives available. Many states also have a lucrative market for the Solar Renewable Energy Credits produced by the system. On a federal basis, the tax owner of a commercial or utility scale solar PV system is eligible to receive a 30 percent investment tax credit, as well as the benefits from accelerated depreciation. We can help you determine whether solar is cost-effective for your application. And you can find other information about state incentives on the DSIRE website. http://www.dsireusa.org/
Does solar PV require a major upfront cost?
Typically not. The majority of our clients enter into a Power Purchase Agreement (PPA) with one of our reputable finance providers. A PPA allows the client to purchase the electricity produced by the solar system at a fixed rate over 20-25 years. The finance provider pays to construct the system and then owns it long term. This agreement benefits our clients, as the cost of the electricity produced by the solar system is usually lower than that supplied by the local utility. The contract also allows our clients to hedge against long-term energy cost inflation risk. This agreement does not appear as an ongoing liability on our clients financial statements. Most PPAs give the power purchaser the option to purchase the system at a later date, usually after seven years of operation.
A great example of a solar PPA is the Cincinnati Zoo and Botanical Garden, a Melink Solar project in 2011. View the Cincinnati Zoo Solar Video on YouTube by clicking here.
Is solar PV a cost-prohibitive technology?
Solar PV systems are a mature technology which is cost competitive and easily adaptable to existing sites – whether mounted on a roof, the ground or as a canopy. The cost of a solar PV system is contingent upon the type, size and physical location of the project.
Our knowledge of numerous financing structures available from national financial institutions, as well as non-traditional lenders, is what sets Melink apart from other developers. We joke around and call it “financial engineering for solar,” but that’s truly the best term for it. We work closely with our clients to determine the most advantageous financing structure for each project.