By Louis-Philippe Lalonde, CMO Ygrene Energy Fund
As renewable energy surges into the mainstream, solar technology has rapidly proliferated to disrupt traditional energy consumption, distribution, and storage models in the United States. According to Greentech Media’s Executive Report on “The Future of US Solar” last year, solar could generate 10% of the country’s total electricity output by 2030–an amount equal to approximately 250 GW or 10 million individual installations. That’s an incredible volume of business for solar contractors and contractors looking to expand into solar.
How might contractors position their businesses for the oncoming solar wave? As the 27.4 GW of solar capacity currently installed (roughly 1% of U.S. output) has developed, an array of innovative, accessible, and consumer-centric financing mechanisms have emerged to streamline solar purchases for property owners and installation processes for contractors.
But for solar to hit the next level of market penetration, contractors need to be able to offer customers a simple, easy-to-implement solar financing program that doesn’t require upfront costs, FICO scores or invasive credit checks but still helps to reduce energy costs. Fortunately, that program is here today: PACE (Property Assessed Clean Energy) is the perfect financing vehicle to help contractors help their customers easily afford solar. As a result, installers can scale their businesses quickly, efficiently, and successfully.
Simplifying the solar sell through PACE financing
So what makes PACE so unique? Traditionally, contractors have turned to debt-inducing financing methods like leases and loans to help property owners finance solar purchases. Compared to these outdated mechanisms, PACE removes the debt factor from the “solar sell” equation, instead incorporating project costs into a recurring payment on the property owner’s tax bill. With no hidden fees, upfront costs, or adverse effects on property transferability, PACE ensures 100 percent financing for thousands of energy efficiency and climate resiliency upgrades–including but not limited to solar, HVAC, roofing, water conservation and hurricane preparedness retrofits.
Approval can take as little as 15 minutes, there’s no debt incurred, and the completed projects don’t factor into the personal credit score of the property owner. It’s fast, it’s efficient, and it’s revolutionizing the way that contractors do business.
For Miami-Dade based solar contractor Raul Vergara, the decision to begin offering PACE transformed his business. “Since we’ve started funding solar projects through Ygrene’s PACE program, Cutler Bay Solar Solutions has installed over 100% more projects,” says Vergara. “We’ve been seeing incredible market success since day one and adopting PACE has helped us evolve from a one-man team into a vibrant solar business active all the way across Miami-Dade County.”
Indeed, PACE-enabled financial products will unlock solar access for a whole new spectrum of residents and businesses alike: unlike traditional lease or loan programs, solar financing through PACE is based on equity available in the property. For contractors hoping to grow their solar businesses, or who are considering entering the solar market, PACE programs offer a wide variety of benefits that consumers will love. At Ygrene, for example, components of our award-winning YgreneWorks program include:
- Low, fixed payments that may be spread out over long terms (up to 30 years)
- A low interest rate and simple annual payments made through property taxes
- Ease of transferability at sale and refinancing
- No bulk assessment on title
10 Million Strong: building your solar business through PACE
For contractors who have no prior experience in the solar space or who primarily focus on roofing, HVAC, or other electrical equipment installations, PACE offers an easy entry point into the solar market and a way to build a business vertically around renewable energy. It makes it incredibly simple to add a solar financing product offering to pre-existing business models, and many contracting companies throughout California, Florida and other states have already integrated solar and other clean energy programs into their businesses through PACE.
To reach 10 million installations by 2030, contractors and property owners need PACE–a simple, low-cost program focused on consumer satisfaction and a proven mechanism for taking your contracting businesses to the next solar level.