Increase reserve funds by decreasing energy bills
Many HOAs are still using expensive local utilities to power their common areas: pools, jacuzzis, lighting and more. Switching your common areas to solar can ultimately be a great decision for both your bank account and the planet.
If you convert to solar power, your HOA can benefit in three major ways:
- Improve competitiveness in a growing market,
- Minimize your housing’s negative impact on the environment, and
- Increase reserve funds by decreasing energy utility bills
From a financing standpoint and, as summarized below, the Power Purchase Agreement (“PPA”) offers the most benefits.
- No (or low upfront) capital costs: The PPA provider handles the upfront costs of procuring and installing the solar PV system. With limited upfront investment, the HOA is able to adopt solar and begin saving money as soon as the system becomes operational.
- Reduced energy costs: Solar PPAs provide a fixed, predictable cost of electricity for the duration of the agreement.. The fixed price plan maintains a constant price throughout the term of the PPA saving the customer more as utility prices rise over time.
- Limited risk: The developer is responsible for system performance and operating risk.
- Better leverage of available tax credits: PPA providers are structured to utilize available tax credits in exchange for lower costs to the HOA. For example, a non-profit HOA, with no taxable income, would not otherwise be able to take advantage of any available tax benefits.
- Potential increase in property value: A solar PV system, that reduces HOA costs, will ultimately lead to an increase in property value.