Many small to medium-sized businesses would like to go solar to save money on their growing electric bills. Until recently, however, there was simply no financing available for smaller projects in either the commercial or non-profit segments of the market.
All that has changed, thanks to the new PACE program (Property Assessed Clean Energy) being offered in most areas of San Diego County.
Similar to residential PACE loans (also called “HERO” loans), PACE financing allows businesses and institutions that own property to borrow up to 20% of the assessed value of their properties for clean energy and efficiency projects, including solar.
Stellar Solar, voted San Diego’s Best Solar Panel Company by U-T readers for the past 3 out of 4 years, recently became qualified to offer PACE loans through Figtree Financing, a local lender based in Mira Mesa.
Because they often own their own properties, churches and other faith-based groups such as private schools can also take advantage of PACE financing to go solar and start saving on the energy bills immediately.
The best part about PACE loans is that the term can extend for up to 20 years with no money down and the projects are cash-flow positive from Year One. One small business in Mission Hills, for example, currently has an electric bill of about $1,225 per month; between energy savings and tax incentives, the PACE solar loan will generate almost $100,000 in positive cash flow in just the first 5 years alone.
For taxable businesses, PACE loans allow them to re-coup up to 40% of the initial project cost — in the first year alone –as direct cash flow from tax credits, depreciation and state rebate payments.
State solar rebates are expected to run out by the end of 2014 so many commercials properties are moving forward now to reserve these funds. Fortunately, with the PACE financing, projects generally remain cash-flow positive, even without the rebates.
Solar has always been a good investment, allowing people to save money while saving the planet. Now, PACE financing allows small-to-medium-sized businesses to take part while also making sure the business maintains a healthy cash flow for growth.