Yoel Hanegbi, CEO of Eshone Energy, shares exciting news regarding the latest methods for School Districts to obtain funding for Solar Projects.
Many school districts are eager to Go Green and installing solar panels on their schools holds great interest for them. But in these tough economic times, many hesitate to pursue it further because they simply don’t have the financing available to get the project started. There are many incentives and rebates available, and some fortunate school districts find they can tap into State Modernization Grants to close the gap and fully fund the Solar Power System. Others put up a bond for voter approval specifically targeted for Solar Photovoltaic (PV) systems and other Renewable Energy applications. And still others are opting to go with Power Purchase Agreements (PPAs), though many would prefer to own the system on top of Going Green.
However, with Bonds, school districts generally end up paying back two and three times the face amount of bond dollars received. For any investment, interest rates are used to describe the cost of capital. For PV solar projects, the initial investment costs are the biggest cost factor so that the interest rate plays an important role in the overall costs of the project.
But if you act fast, you can get 0% or near 0% bonds the Federal Government is offering through the American Recovery and Reinvestment Act (ARRA).
These two bonds, Clean Renewable Energy Bonds (CREBs) and Qualified School Construction Bonds (QSCBs), allow school districts to pay off the bonds from the dollars they would have paid for their electricity consumption. Dollars that had previously been earmarked for the utility company is now designated for bond repayment and after 15 years, it’s paid off and then all that money can now be funneled back into the general fund!
- Clean Renewable Energy Bonds (CREBs) are a means to lower the cost of capital for renewable energy projects. They can provide public entities with interest free – or near 0% interest - capital. Public entities can apply for those funds at the IRS for allocations. Once the public entity has received an allocation, a CREB can be issued to finance a PV Solar project. The ARRA has increased the allocation to provide $2.4 billion to finance qualified renewable energy facilities but have a deadline of 8-4-09 for 2009 so unless you’re already in the process of filling out the application (starting on page 21), it’s too late to file this year but now’s a good time to become familiar with the requirements for next year’s filing deadline.
With upfront costs being a major factor in the decision process, these two methods can significantly reduce that cost, making the decision to Go Green a responsible and affordable choice. Not to mention that you’ll be doing your part to stimulate the economy by creating jobs, which is the main thrust of the ARRA in the first place.