Purchasing a solar system cannot always be financed out of existing cash flow. There are financing and leasing options that have cash flow impacts as well as risk and tax considerations.
It is possible not to acquire the solar system but have it owned by a third party who sells you the generated electricity at a set rate. This is called a Power Purchase Agreement (PPA). As with any finance option, a PPA will see an intermediary introduced, who makes a margin.
In summary, the right finance solution needs to be assessed from a range of perspectives so that you understand all relevant factors and make the best decision.
Renewable Energy Certificates (rebates)
Renewable Energy Certificates (REC’s) can be created via the Federal Government’s Renewable Energy Target (RET) Scheme. These effectively reduce the cost of a solar power system, as they are a type of “rebate”.
If your solar system is 100kW or less in capacity, it’s eligible for ‘Small Scale Technology Certificates’ (STC’s) which can be redeemed immediately. This offers an significant discount off the upfront capital cost of your solar system.
What if I have a large-scale solar system?
Larger solar systems (above 100kW) can be registered as power stations under the RET scheme and can generate ‘Large Scale Generation Certificates’ (LGC’s).
These LGC’s are created monthly or annually and can then be registered and sold according to actual metered solar generation on an ongoing basis.
However, the value of LGC’s has decreased substantially and is predicted to be close to zero going forward.
STC and LGC rebate calculations can be undertaken by your Independent Solar Consultant.