Commercial Solar Operating Leases
The traditional operating lease has done for commercial solar projects what the PPA did for residential solar. It has made the sales process simple, easy and fast while making a customer’s acquisition affordable. The big difference between the programs is in the results. The commercial customer obtains greater overall value from solar when using the traditional operating lease as a low-cost path to ownership at an affordable price, versus the PPA (or its first cousin, the 20-year solar industry lease) offering only cost-reduction.
Before preparing a proposal, the successful solar sales professional will take the time to ask a few questions about a commercial customer’s ownership structure and find out who pays the taxes on the company’s net income.
Because most companies do not pay income taxes (because they are LLCs or S Corporations) and do not like to pay cash for equipment (could be a poor use of working capital), a proposal containing an operating lease cash flow will simplify your presentation (no need for detailed tax benefit descriptions and calculations).
If you ever wondered why a cash sale was taking so long to complete, and felt totally helpless in closing the sale, it was probably due to the customer being busy arranging financing or figuring out a tax strategy (how to use a big ITC and depreciation deductions). You can take control of the situation and speed up the process by working with a knowledgeable financing partner that is responsive to your needs while addressing customer objectives.
CleanView Capital can help determine if an operating or capital lease is the best fit for your customer. CleanView’s sales tools help speed things up, such as the QuickQuote program that can be downloaded to your computer and cash flow projections prepared by CleanView for your projects at no cost. CleanView’s straightforward customer handouts provide prospective customers with a comprehensive overview of, among other things, CleanView’s traditional operating lease with innovative purchase options, application & approval process, and six pre-qualification questions.
Because you will be pitching ownership, and not a cost-reduction program, your proposal should focus on a company making an investment subsidized by electric savings as well as the shared value of the ITC monetized by the leasing company. It should also highlight the return on investment over the system’s life (not on the customer’s monthly or yearly cash position during the relatively short lease term). A company that is prepared to make an investment and own a solar system at the end of the lease should not mind having a relatively small amount “invested” along the path to ownership.
For more information about operating leases and why they are an attractive alternative form of financing for the C&I solar market, view a recording of our webinar with Stan Fishbein of CleanView Capital HERE. Additional information also available at www.CleanViewCapital.com or by contacting your CivicSolar Account Manager.