Contractors

Welcome to GreenDay Finance, your go-to resource for smart, sustainable
financial strategies in the renewable energy sector. Today, we’re diving into the
solar Power Purchase Agreement (PPA) market — a booming field for
Engineering, Procurement, and Construction (EPC) companies and Solar
Developers. With the global shift toward greener energy, it’s important to be ready to take advantage of solar PPAs. Here are six key considerations for doing that:

● Understand solar PPA financing: Solar PPAs are financial agreements
between a customer and a third-party developer for the installation and
operation of a solar energy system on the customer’s property. The developer
assumes responsibility for designing, permitting, financing, and installing
the system. The customer agrees to purchase the system’s electricity output
from the developer for a set period of time at a fixed rate. With GreenDay
Finance’s commercial PPAs, business owners yield immediate savings for
their commercial properties. They benefit from the guarantee of lower rates
for up to 25 years, which gives them control over electricity expenses with
predictable and reduced payments.

● Plunge into the solar PPA market: It’s estimated that the overall PPA
market size will reach $35.3 billion by 2033, growing at a compound annual
growth rate of 31.7% from 2023 to 2033. Solar project funding with PPAs
represents more than 51% of the share of PPAs. The solar PPA market is
expected to yield the highest growth among renewable energy PPAs,
according to the Solar Energy Industries Association (SEIA). PPAs are
popular because they require no upfront investments and yield immediate
savings.

● Manage risk like a pro: According to the Environmental Protection
Agency, PPA risks include more complex negotiations and possibly higher
transaction costs than buying solar photovoltaic (PV) systems outright. In
addition, property values might be reassessed, potentially increasing
property taxes. And site leases may affect a solar producer’s ability to
change property in ways that would improve a PV system’s performance.
Before you even move forward on the project, you face a number of other
risks. Projects can be delayed or canceled because of complications with
permitting and interconnection; this costs millions each year globally. “One
solution: Develop a comprehensive plan that addresses potential risks upfront. By demonstrating your readiness for PPA financing, you can instill
confidence in potential investors,” said Abigail Guzman, Origination &
Acquisition at GreenDay Finance. It’s also important to address inquiries
from investors promptly to build trust and rapport, she said.

● Keep an eye on policy: It’s important for EPC firms and Solar Developers
to stay updated on state and federal regulations that affect solar projects.
Regulatory risks can significantly impact project feasibility and financing.
Resources such as the Department of Energy’s local government guides and
SEIA’s policy updates can provide important insights into regulatory issues
and help developers address them.

● Focus on operational efficiency: In addition to identifying risks and
possible solutions, you should concentrate on efficient project management
to control costs. This includes accurate budgeting, forecasting, and
employing advanced project management tools. Solar project management
software can help contain costs by creating opportunities for better
organization, collaboration, and monitoring of project tasks and resources. In
the past, spreadsheets and paper documents were used to implement project
management. This software can be especially helpful to EPCs and solar
developers who are juggling multiple projects.

● Build long-term relationships: “Your network is your strength,” said David
Jimenez, Vice President of Sales at GreenDay Finance. “We all rely on each
other, and that’s where reliability comes in. Simply put, we need completed
projects to secure funding and, conversely, our contractor network counts on
an experienced financing partner for timely payments and overall security.”
It’s important to build a strong network and identify the right allies when
pursuing solar project funding. Working with these allies, you should also
provide clear and transparent information, which is essential to building
trust.

EPCs and Developers must adopt well-thought-out strategies in the rapidly
evolving solar industry to ensure project success. By understanding solar PPA
financing, managing risks effectively, optimizing costs, and building strong
relationships, you can enhance the financial viability of solar projects.

For personalized advice and financial solutions, contact GreenDay Finance to
discuss how to support your solar development needs. Schedule a consultation
today to take the next step toward maximizing your project’s success. We finance everything from commercial, industrial, small utility-scale, non-investment-grade off-takers, nonprofits, schools, houses of worship, and unique businesses that want solar.