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Creative Financing Integrates Solar and Storage

November 10, 2014 By Karen Henry

solar-financing energy manageWhen used together, solar and energy storage systems act in a symbiotic way. During the day, solar panels harness the sun’s rays to generate power. Excess power is stored by the storage system and is then deployed during the night, at times of intermittent sunlight and as needed to alleviate pull on the grid during peak demand times.

However, because of the relative complexity and sophistication of an active energy storage system compared to a passive solar system, it is not realistic to sell them within the same contract, says an article in Forbes. Storage systems are best purchased under a power purchase agreement (PPA) while solar systems are more optimally bought through a loan.

A loan power purchase agreement (LOPPA), the article argues, would combine the best of both worlds. With a LOPPA, the solar system would be purchased by a loan while the storage system would be installed under a PPA, allowing the two payment vehicles to be combined under one document with one monthly payment.

While such a financing option does not currently exist, it is coming, the article says. The consumer would benefit from getting sustainable, renewable power at a lower price, while the solar dealer would earn revenue from the solar loan, the power purchase agreement and additional, incremental revenue streams.

SolarCity recently said Burton School District in Tulare County, Calif., had hired it to install a combined solar and energy storage system.

Image via Shutterstock.

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