4 Considerations for Financing the Transition to Clean Energy
You’ve made the decision to change to LED lighting, install a more energy efficient HVAC system, develop a microgrid to increase your energy independence or make another energy-efficiency move. Congratulations!
Now it’s time to start thinking about financing. How you will pay for the project? How will you find and select a financing partner? Whether you’re a company ready to take the first steps, or a clean-energy vendor looking for the right partner for your clients, consider these four points when it comes to financing.
- Select a finance partner with knowledge of your industry and your clean-energy technology. Your time is valuable. You shouldn’t have to spend time educating your finance partner in the basics of what you want to do. Clean energy can be complex. It takes time to really understand what’s involved, how to most cost-effectively install it and what government incentives are available (and how best to utilize them). Financing companies with this expertise will be able to develop the financing solution that’s right for you.
- Look for a willingness to grow with you. Companies move to clean-energy improvements in many ways, in many different timeframes. Most are, as the title of this post says, transitioning to clean energy versus implementing major projects costing tens of millions of dollars. Maybe it’s improving power resiliency in just one part of the country or rolling out a LED lighting system one site at a time. A financing partner that does smaller projects, with programmatic solutions designed to scale as needed, can be invaluable in supporting the deployment of assets you need to reach your clean-energy goals.
- Learn about the benefits of Energy-as-a-Service contracts. Energy-as-a-Service (EaaS) is a business model whereby companies pay for an energy service without having to make any upfront capital investment. The capital costs of energy-efficiency upgrades are paid from the savings they will generate over time. Additional benefits of EaaS contracting include the ability to modernize energy systems, reduce energy costs, make progress toward meeting sustainability targets, and increase resiliency.
EaaS contracts are unique, and not all lenders will provide financing against them. Finding a financing partner that is familiar with this type of contract and is willing to lend against the EaaS payment stream can make a significant difference in your clean-energy transition efforts. And while many lenders will only work on large-scale projects, some established financing companies routinely work with smaller companies and in more varied situations. If you can work with one of these to implement an EaaS model, you’ll have much greater flexibility and freedom to use your cash for operating and growth needs.
- Consider the long term. In the clean-energy space, obtaining financing is only the first step. To make your project truly cost-effective, it can be smart to work with a financing partner that is also a business partner. Input from experts in areas such as project viability, evaluation of customer contracts and credit analysis can make a clean-energy project more profitable, much earlier.
Each day, we see shareholders and stakeholders requiring companies to be more and more accountable for their carbon footprints. We’re seeing business owners and leaders wanting to do the right thing and taking steps to learn all they can about smart energy-efficiency moves. From electric-vehicle charging infrastructure to power resiliency projects to renewable natural gas, the time for the transition to clean energy is here – and flexible, engaged, experienced financing partners are available to make it happen.
Clean-energy financing with Mitsubishi HC Capital America
At Mitsubishi HC Capital America, we’re dedicated to improving the communities where we operate with a commitment to the United Nations Sustainable Development Goals, with an emphasis on clean energy and mobility. Partnering closely with recognized developers, investors, owners, operators and providers of clean-energy technology, our cross-functional clean-energy transition work provides comprehensive leadership, financing and support for businesses throughout North America.
Our fully customizable solutions provide financing for projects include:
- Comprehensive dealer readiness for vehicle fleet electrification
- EV charging stations/infrastructure
- Lighting systems
- HVAC systems
- Solar systems
- Building controls
- Backup generators
- Microgrids
- Conversion of waste to renewable natural gas
- Customized pay-for-performance models, including EaaS, energy subscriptions and sharing arrangements with partner companies
Get started today by contacting us here.