The use of renewable energy sources, particularly solar, is on the rise, but that does not mean there are no barriers to its expansion, such as upfront costs. That is why a range of financial options have been introduced to try and mitigate the expense of solar investment.
What Are the Costs?
Many people are seeking out providers such as https://www.precisiongreenenergy.co.uk/renewables/solar-panel-installation/cotswolds/ for solar panel installation Cotswolds, but they may have concerns about the costs. Solar systems are complex, made with expensive components and need to be installed by professionals. That comes at a price.
How Can They Be Mitigated?
Installing solar panels is a one-off expense that can be paid back over time with a reduction in your electricity bills and increased energy independence and security, making you less vulnerable to market fluctuations. There are also ways to mitigate the initial costs.
Power Purchase Agreements
Power purchase agreements, or PPAs, are based on fixed contracts lasting from 10 to 15 years, meaning they are independent of market fluctuations. A PPA provider installs the solar system and is responsible for maintenance. The business purchases the electricity for a lower cost than regular grid energy.
Grants
Many local authorities offer grants to help businesses develop renewables, including their solar capacity. These are often specific to a region and may not cover all expenses. Unfortunately, there is no nationwide scheme for businesses as for other organisations.
Leasing
Leasing is another arrangement that involves third parties controlling the installation and maintenance of the system whilst the business pays it for electricity. Unlike PPAs, the costs may increase depending on the nature of your contract.
Asset Finance
Asset finance is when a company borrows money specifically to install a solar system, then repays a fixed amount every month. This spreads the cost over time whilst allowing solar power to start providing cheaper energy.
By considering the range of different financing options, businesses may be able to mitigate the impact of solar power’s upfront costs, allowing them to benefit from increased efficiency in the long term.
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