New financing models to drive demand for commercial solar

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A bunch of new solar start-ups are raising capital to target the business market for rooftop solar with new financing models.

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A new solar start-up is targeting the commercial-scale market in Australia   with a financial model that allows business customers to install large rooftop systems for zero upfront payments.

hammond solarSmart Commercial Solar officially launched its “proprietary Pay-As-You-Go solar model on Friday. It is the brainchild of Huon Hoogesteger, who describes it as a “financial product with solar attached”.

RenewEconomy does not vouch for the system or otherwise. But we think it is worth noting, because it is clearly part of a growing trend that will see solar installations boosted by financial innovation as much as technology innovation.

Hoogesteger says his scheme will allow businesses to generate the equivalent of 30-40 per cent of their electricity needs with no upfront payment.

The solar output is sold to the business at a fixed price, and at a discount to the grid.

At the end of a specified period, usually between five and ten years, the enterprise owns the solar system outright and can generate its own power for virtually no cost.  Since the installation has a guaranteed life of twenty-five years, Hoogesteger says this translates to two decades of power generation.

The model appears to be a variation of those currently being brought to market, including solar leases and power purchase agreements. RenewEconomy is aware of at least another three start-ups seeking finance to back their venture, and will report on them as they come to market.

“This is a very different kind of innovation for our industry and for Australian business –one that we think will have a major impact on the way many enterprises use solar,” Hoogesteger said in a statement.

“Unlike solar leasing or the various financing schemes out there, Pay-As-You-Go allows us to deliver low-cost solar energy and a rapid path to ownership for enterprise. “

Hoogesteger says many businesses with stable revenue streams are increasingly looking at ways to reduce – and lock in – their electricity costs without incurring any capital expenditure.

“The future of solar is local.  It’s about on-site generation and turning your premises into the power plant,” said Hoogesteger. “Frankly, almost every enterprise in Australia should have solar as part of their energy equation.”

 

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5 Comments
  1. John P 5 years ago

    This new ‘start-up’ and others like it are not RET dependent.
    They expect to be successful simply because solar is now cheaper than coal.
    This has been proved by the 1 million plus homes that are running on rooftop solar.
    These homeowners have figured it out – solar is cheaper than coal.
    While the Abbott dinosaurs struggle to support big coal, the rest of the world is seeing the future, they like what they see and are going that way.

    • Stan Hlegeris 5 years ago

      John P is spot on.

      While abandoning the RET is a reckless mistreatment of companies which relied upon it, I suspect we’ll be just as well off without it.

      The RET started out as a way to encourage non-carbon energy production. The Abbott government has perverted it to be a tool to restrict the access of clean energy to the electricity market. Consumers of electricity will ignore these efforts and look after themselves. Bravo.

  2. Megs 5 years ago

    Yes John and Stan. It looks like we are at a point where the numbers do the job for some applications of renewables. The point where you might say “the stone age did not end because they ran out of rocks”, but the retrospective trashing of committed business investments is a dreadful thing for any government to do and more so for those claiming to be free market liberals. In any context it is feed for what is called in the investment world “sovereign risk”. where governments change the rules mid game. It is appalling and the most conservative business people in the country should be up in arms at the breaking of such a sacred principle.

  3. Huon Hoogesteger 5 years ago

    I really appreciate the positive response to this article.
    Even more so the positive response to the program; We have many exiting new projects under the scheme.
    The program we’ve constructed is now more holistic than any other similar scheme in the market, as we bring local investment to local projects, and guarantee the results for the investor and the end user.
    It is about marrying the technology to the finance, too many models are financiers trying to do solar, or solar guys trying to do finance; you cannot separate the model, and you cannot pass off the continuation of O&M through the contract either.

    Happy to say, whatever happens in Australian politics, we are a power company providing cheaper, cleaner power for longer. Good results for all stakeholders.

    http://www.smartcommercialsolar.com.au

    • Peter D 5 years ago

      This is great. I know Tindo Solar in Adelaide are offering this too. With this offer every commercial business roofspace with a high power demand during the day would benefit. Just need to get the word out there! And it’s good the commercial sector has an alternative option with the uncertainty around the Renewable Energy Target

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