Drive your energy cost reduction with SHR Energy Management, a pioneer and leader in Solar Power Development and Financing

FinanceThere are several financial models that SHR Energy may use in their solar power projects, in order to customize project financing in line with the specifications of the financier, the building facility owner or power consumer.

Lease Your Property

The sun is a great source of energy, but it can also be a great source of revenue. If you own underutilized land or a large, unobstructed, flat roof, you can lease this space to SHR and generate incremental annual revenue from the property. Advantages of this approach are: it generates revenue for you, helps create affordable power for your community, and helps protect the earth.

Own Your System

Perhaps you prefer to invest your funds and have full ownership of the PV system. All power savings and federal/state incentives come directly to you, rather than a third-party financier, to offset the cost of purchasing the system. You would obtain all the benefits of the other financial models: lower energy expense, reduced expensive power purchased from the grid, reduced carbon footprint, and presenting a positive “green” public image.

Power Purchase Agreement (PPA)

The most frequently used financing model is a Solar Power Purchase Agreement (PPA). The popularity of the PPA model is based on several factors:

  • The building owner does not invest his own funds in constructing the solar power system. Construction is funded by established investors, working through a LLC which owns and operates the solar system. As a consequence, the building owner has no upfront costs to finance. There are no hidden or up-front fees or expenses.
  • The solar system operation and maintenance will be the responsibility of the LLC. Maintenance includes on-site inspections twice per year and remote monitoring. There is no need for the building owner to hire technicians trained in solar power operations.
  • The building owner contracts with the LLC to purchase electric power for 15 or more years (customarily) at a discounted price compared to “off the grid” electric rates. This allows the building owner to accurately forecast power cost. Not only does it provide for immediate savings as an alternative source of electricity, it also serves as a financial hedge against future utility rate increases.
  • The purchase agreement may be renegotiated and extended, as desired by the parties. On average, most PPA’s are 15 -25 years in length.

The diagram below sketches a typical PPA. This process begins with formation of the Project LLC. The LLC is funded by investors to construct the solar facility. When power generation begins, electricity is sold to the end user, renewable energy credits are sold to either the utility or the open market, and the Investor receives his negotiated return on investment.