Solar Financing for Utility-scale Solar Projects 0

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Over the past few years, solar financing for residential and commercial solar projects together with the utility-scale solar financing options become prominent in the solar industry. Aside from the solar financing, most of the growth of the solar deployment is driven by strong renewable portfolio standards (RPS), federal incentives and solar rebates. State and federal policymakers make policies to increase the number of investments in renewable energy development. 

With all these solar incentives, rebates and incentives utility-scale solar projects are getting significant numbers and capacity. For today’s article, we will discuss some of the solar financing programs that provide utility solar developers with access to huge capital at low-interest rates. 

But before we proceed to the solar financing for utility-scale solar systems, it is important to understand what the utility-scale solar system is about and how solar financing works. 

What is a Utility-scale Solar System?

A utility-scale solar system generates a larger scale of solar power compared to the residential, commercial and industrial solar systems. Sometimes a utility-scale solar project is referred to as the “front of the meter” while solar projects under distributed generation systems are described as “behind the meter”.

Utility-scale projects are used for several applications. Generally, it sells the generated power and fed it directly into the utility electric grid. Then, the power is equally distributed to different facilities and utilities that need power. 

Currently, there are several utility-scale power plants in the United States that supply power across all regions. The number of solar power plants and farms is growing annually aiming to prolong the sustainable living conditions in the world. 

Solar Financing Options for Utility-scale Solar Projects

Since utility-scale solar projects produce massive power generation, it is quite evident that the entire deployment of this project also entails a huge budget.  Thus, a solar financing system would be a great help. Below are some of the financing options applicable for utility-scale solar projects.

Power Purchase Agreements (PPA)

Utility-scale solar power projects need a huge amount of finances to cover all the expenses, so applying for a certain kind of solar financing contract is required to meet the overall financial needs of the project. Mostly, a lot of utility solar developers apply to a renewable energy contract called a Power Purchase Agreement (PPA) to complete the process of solar project development on time. PPA includes utility, commercial, industrial and institutional customers. 

Generally, the PPA provides the cost, interest and revenue certainty for the project’s energy over a fixed timeline, with contracts typically lasting between 12 to 20 years. If you operate a non-profit utility, then you can benefit from the federal 30% solar investment tax credit.

Virtual Power Purchase Agreements

Most corporations opt for Virtual PPAs to take advantage of the low cost of utility-scale solar. In a VPPA, the offtaker must apply for a financial contract for differences depending on the project’s solar energy and an agreed-upon strike price. Sometimes a utility-scale solar project is referred to as the “front of the meter” while solar projects under distributed generation systems is described as “behind the meter”. Typically, VPPA acts as a financial hedge against unpredictable electricity prices.

Private Bank Financing

For large investment projects such as utility-scale solar projects, the other option to get financial support is banks. You can apply for private bank financing. Some of the banks offer solar financing for mid to large-scale solar projects, which you can take advantage of. However, unlike other solar financing companies, the process in the bank is quite long and requires a lot of documents and discussion about your proposed project. 

Solar Financing Companies and Marketplace for Utility-scale Solar Projects

Many solar companies offer a few financing options for utility-scale solar projects to accelerate the growth of solar power deployments around the globe. 

O3 Energy

Solar financing options: Solar PPA

O3 Energy is a solar company that specializes in solar development, solar financing options and other solar management services for both commercial and utility-scale solar projects. Since its inception, its main goal is to increase cleaner energy production by offering financial assistance to different utilities. They offer several financing options, you can lease solar power equipment, own the system or share the ownership with other stakeholders.


Solar financing options: Property PPA, PPAs, Solar Lease

Through years of experience, the Greenskies team and its partners have successfully been able to offer financing structures, what’s good about it is, you can get customized structures that suit your solar project. . They can also finance projects with SRECs, and other incentives, as well as non-incentive-based markets.

Greenskies has relationships with multiple legal and accounting expertise as well as tax-equity investors. They can offer small to large financial transactions ranging from $1,000,000 to upwards of $100,000,000.


Solar financing options: PPAs

SCF is one of the reliable solar finance for utility-scale and community solar projects.  Over the years, they have been actively supporting larger community solar projects from developers, at various stages of development. They offer a solar Power Purchase Agreement (PPA), which helps solar developers skip the burden of solar ownership and maintenance while bringing them huge savings and no upfront cost.

Positive Energy Limited

Solar financing options: Cash Loans, PPA

Positive Energy Limited offers solar finances and management platforms to help solar developers obtain a better finance workflow in building solar projects from small to mid-size. Their main goal is to finance all solar projects to increase the number of renewable energy deployments, globally and maintain a greener world for the next generation.

Live Oak Bank

Solar financing options: Cash Loan

Live Oak Bank is well-known for its expertise in government-backed loans, Aside from that, they also fund larger opportunities such as C&I solar, community solar, and utility-scale solar projects. They offer solar funds over $500MM to several solar project developers between 2017 and 2018.

Final Thoughts

When it comes to utility-scale solar systems, several solar financing companies and banks offer multiple strategies and options to support the projects. You can own the system, share ownership with other stakeholders and developers or sign a PPA. Among the other financing options, a Solar Power Purchase Agreement (PPA) has quickly gained the interest of solar developers, becoming the most evident financing option. 

Regardless of your choice, these financing options have their own advantages and drawbacks. But overall, they are all helping in accelerating the growth of the solar industry.

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