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There are many different ways that you can fund your Renewable Energy Project and through our dedicated funding partners we can offer you the following options:
As always the best way to fund any project is through capital, this will give you the best Return on Investment and the Shortest Pay Back Period.
However, there are several options for using capital, allowing businesses to purchase any Renewable Technologies on a no-deposit basis.
The Key Benefits if the following agreements are:
A Power Purchase Agreement is a vehicle that allows you to install a Renewable Technology completely free of charge over the term of a lease (usually 10 to 25 years)
This form of finance is generally used for Solar PV, and more latterly CHP.
Benefits: Zero Capital Expenditure - Reduced Energy Costs from day one - Reduced Carbon Output - Installed, Maintained & Insured for the period of the lease.
Disadvantage: The savings are less than if the project were funded via capital
This has probably been the most popular of the finance agreement for capital purchases over the past 20 years, however there are now alternative methods of funding (see below) that offer some advantages over this tried & tested method
Benefits: Variable time spans available (12, 24, 36, 60 months)
Disadvantage: VAT must be paid upfront (£100,000 loan requires £20,000 VAT to be paid.)
Lease Purchase is very similar to Hire Purchase, the difference being that the VAT is paid monthly.
This is an attractive option for some accountants because the rental shows on the Profit & Loss Account and not the Balance Sheet. The VAT on Rental payments is also paid monthly and not up front.
Benefits: Not shown on the Balance Sheet, with the cost saving easy to identify on the P+L. With one additional payment beyond the payment terms, title reverts to the business.
Disadvantage: Not for every business.