There are plenty of reasons to invest in clean energy solutions for your business. However, the immediate costs and considerations sometimes seem too daunting to take that first step. Luckily, there are several options for the forward-thinking entrepreneur who wants to build their venture on a foundation of environmentalism, social responsibility, and resilience for the future.
When you’re ready to upgrade, consider some flexible financing options. If you need help figuring out where to start, contact your energy provider about conducting an energy assessment of your business. They may also provide insight into some of the financing options and benefits described below.
Ways to Pay for Future Energy Upgrades
1. Financing Options with Your Bank and Energy Company.
The upfront clean energy upgrade costs are often steep. More often than not, a business can only purchase some things they need outright. That’s why financing options are available to help you keep immediate funds and pay for upgrades in installments. This is usually done via on-bill repayment or on-bill financing.
What’s The Difference Between On-Bill Financing and On-Bill Repayment?
With on-bill financing, you secure a clean energy upgrade with a down payment and pay off the remaining cost on your utility bill. The relationship remains between the customer and the energy provider. On-bill repayment has one key difference: the loan is provided by a third-party lender.
If you decide to go solar, your utility company or bank may offer you a solar loan. This rent-to-own plan is easier to understand than buying a solar system outright, and it’s the best choice for a small business or company that needs a lot of energy.
2. Leasing Equipment.
Another common method for obtaining the equipment required for energy upgrades is through a capital or operating lease. A capital lease is likely your best option if you’re investing in equipment permanently for the long term. The equipment becomes a company asset: you pay all associated taxes and charge any repairs and maintenance. This is a great way to get clean energy tax credits.
This could be a particularly enticing choice for those in manufacturing or construction that may be considering industrial solar integration or even any business that’s considering going fully solar and struggling with the costs of system installation. Businesses in the manufacturing industry also stand to do the most social good by prioritizing energy efficiency and switching to renewables. On the other hand, an operating lease is more like a rental. You can extend the lease, purchase the equipment at the contract’s end, or return it.
3. Incentives and Rebates.
Businesses that switch to green energy can benefit from federal, state, and county tax breaks. The Environmental Protection Agency’s Database of State Incentives for Renewables and Efficiency is an excellent resource for researching region-specific benefits of upgrading to a clean energy efficient system. Separately, some grants are provided by the state, local, and specific federal government departments to help fund clean energy initiatives — particularly in rural and low-income areas.
One’s energy provider may provide rebates or other financial incentives for specific equipment installations and upgrades, from simple thermostats and lighting improvements to total retrofit projects. Some companies are willing to pay for up to 70% of these upgrades as part of the program. And, like governmental grants, some have their grant programs for businesses switching to green energy.
A socially responsible entrepreneur always thinks about aligning their values with their business. Switching to green energy is one way to reduce costs while demonstrating a commitment to the environment. However, the transition can be costly even if it saves money in the long run. But with suitable financing options, clean energy is well within reach — bringing us closer to a greener future.
