There are many ways to finance a solar photovoltaic (PV) system: cash, leases, and loans being the three most popular.
Unfortunately, many homeowners and businesses don’t qualify for these financing options due to a combination of insufficient funds, bad credit, or hesitance about taking on personal debt.
However, Alberta, Canada, is about to introduce a new solar financing initiative known as the Clean Energy Improvement Program (CEIP). Once launched, CEIP could help make going solar both easier and cheaper for a much larger swath of the population.
To understand why, keep reading.
What Is the Clean Energy Improvement Program?
CEIP is a type of Property Assessed Clean Energy (PACE) incentive that combines many of the best aspects of traditional solar financing – minus the hurdles that often leave potential solar customers on the sidelines.
Once enrolled in the program, you receive the money necessary to cover a new solar PV installation (just as you would with a normal solar loan). But unlike with a solar loan:
- You don’t pay down the balance every month using your own money.
- The loan liability isn’t personally attached to you – the property owner. Instead, all repayments are made annually through your property taxes using an “assessment” added to your yearly tax obligation.
In effect, going solar through Alberta’s Clean Energy Improvement Program means you’ll see a modest increase in your property taxes spread over decades. However, this slight increase is less than your current electricity costs, which allows you to go solar and start saving money on Day 1.
Better still, CEIP financing itself is tied to the property, removing the need for the types of credit checks that often prevent customers from qualifying for traditional solar loans.
Even for those with perfect credit histories, PACE financing allows them to go solar without taking on any personal debt. When these customers are ready to sell their solar homes, the next buyer automatically takes over the remaining portion of the PACE balance.
(Are you interested in the benefits of solar panels for commercial buildings? Take a read of our blog!)
Who Is Eligible for Alberta’s Clean Energy Improvement Program?
Suppose this PACE initiative is similar to others across Canada. In that case, it will eventually provide 100% funding for a range of renewable energy improvements – including solar PV installations for residential and commercial customers.
To be eligible for the program, however:
- You must be the owner of the property to qualify – and not a renter or lessee.
- You must be up-to-date and in good standing with past property taxes.
In addition, CEIP financing is based on each property’s tax capacity – i.e. what the home or business is worth (based on previous tax assessments).
Is CEIP/PACE Solar Financing Right for You?
Not necessarily. Depending on your situation, there may be compelling reasons to use more established solar financing options like cash, leases, and loans.
1) When to Use Cash
Cash offers the shortest payback periods and highest ROIs – provided you have the liquidity to finance a new solar PV system entirely out-of-pocket.
2) When to Use Solar Leases
Leasing allows you to go solar for $0 down. But you technically never break even since leasing involves renting your panels and paying a monthly charge for the clean electricity generated. This financing option can also make your home or commercial property harder to sell since the next buyer must be willing and able to take over the remaining portion of the leasing agreement.
By contrast, PACE financing is tied directly to the property and is already factored into the resale price. Moreover, it’s a pretty easy sell since (like you), the next occupant receives a solar installation and instant savings on Day 1.
3) When to Use Solar Loans
Loans also allow you to go solar for $0 down. You receive the money up front to pay for your system. And you then use your monthly utility bill savings to pay down the loan balance over time. The main downside is that you must successfully pass credit checks. Worse still, most solar loans are serviced monthly, which requires more paperwork and maintenance.
With PACE solar financing, you also receive the benefits of PV system ownership for $0 down. But there are no credit checks. And the bills come annually – not monthly.
How to Enroll in Alberta’s Clean Energy Improvement Program
The City of Edmonton is currently conducting a 2-year pilot project of the CEIP, with $9.6 million in funding for up to 80 homes and 20 businesses.
As your leading solar company in Alberta, we will keep you posted on developments as they unfold. But if you have questions in the meantime – about PACE loans specifically or solar financing in general – contact us today for a free consultation.
EVOLVsolar is Western Canada’s leading solar company. We have one mission: to make solar energy affordable while giving back to the environment. By investing in solar power, you can save money on energy bills, upgrade the value of your property and reduce your energy output. You can expect high-quality solar panel installation, world-class workmanship, excellent customer service and the best solar technology available. Our success has established us as the go-to solar installers in BC and Saskatchewan, and one of the leading solar companies in Alberta. Experience the EVOLVsolar difference by contacting our corporate office today at 1 (844) 276-4004.