Solar Loans vs. PPA: A Comparison
Solar loans and solar PPA contracts are popular solar financing options. Let us take at the look benefits of a solar PPA as compared to the benefits of getting a solar loan for your business or home energy use purposes.
Businesses and residential consumers looking to adopt solar power without bearing the initial investment can opt for solar financing options. Solar loans and Solar PPA (Power Purchase Agreements) are the two most widely utilized solar financing options, which are gaining popularity these days.
As one of the leading solar energy companies and a facilitator of solar loans and solar PPA financing, Insolergy has compiled the following points, to objectively assess these two solar financing options, and to help you in deciding which one suits your purposes the best.
Here’s a look at Solar loans Vs. PPA:
Insolergy is an approved business facilitator with IDBI Bank Ltd. for availing loan for solar power plant in India. The solar energy company helps homes, businesses and industries avail loans for installing solar PV system through a structured and easy process that focuses on the quality of the solar PV system.
Here’s a look at the benefits of getting a solar power loan:
The solar loans are designed such that the EMI comes to around 75 to 80 % of the saving made in electricity bill. This allows the consumer to immediately reap the benefit and achieve positive-savings from day one.
Owning a solar PV system by yourself comes with its own benefits. For commercial users, this means the ability to claim Accelerated Depreciation in the Income Tax. On the other hand, residential users can make use of the subsidy provided by the government.
The typical loan term is 5 years, as compared to the life of project which is more than 25 years. Hence, the consumer reaps 100% benefit for the remaining 20 years life of the project.
Now, let’s take a look at what opting for a solar PPA contract can mean.
Insolergy has previously addressed and explained solar PPA financing in India. Let us now take a look at the benefits and key considerations of opting for a Power Purchase Agreement.
High consumers of energy such as industries, housing societies and townships can significantly benefit by opting for a solar PPA contract. On an average, the Solar PPA allows the consumer to save around 25% to 40% of the electricity bill from day one.
An advantage of entering a solar PPA agreement is that the installer is responsible for the maintenance of the solar PV system for the entire term of the agreement. This lets solar energy consumers enjoy the benefits of solar power without having to take complete ownership of the solar PV system.
A PPA term typically lasts from 12 to 25 years. PPAs create an energy delivery agreement between such commercial users and renewable energy project developers that allow the organization to lock in energy prices for up to 20 years.
You might also be interested in: PPA for commercial solar
About Insolergy Technologies
Insolergy Technologies is an official business facilitator with IDBI bank, having assisted and enabled eligible users to avail solar loans for solar power plant installation. s mentioned earlier, Insolergy has worked with commercial establishments across Indian and helped them access clean energy by installing PPA systems for them. Get in touch with the solar energy company today to install solar power without worrying about the capital cost.