The right financing partner can propel your prospects’ renewable-energy goals.
Embarking on a renewable-energy initiative can shrink a business’s carbon footprint, enhance its profile as an enlightened operation and improve its bottom line.
Yet despite the clear advantages, some organizations may hesitate to implement renewable-energy projects because they often require substantial capital up front.
A Long-Term Commitment
“We’ve long recognized that renewable energy is here to stay,” says John Wolfe, Director of Business Development for the Commercial Equipment Finance Division of M&T Bank, the arm of the bank that oversees renewable-energy financing.
To underscore this pledge, the bank recently expanded this division to better serve its renewable-energy clients.
“We’ve made a long-term commitment to providing structured solutions to the renewable- energy industry,” says Wolfe. “We’re here to help our clients understand their current energy financing options and what that can mean for their customers, their businesses and their communities. We all have a vested interest in being thoughtful environmental stewards.”
Know Your Energy Financing Options
Businesses may be more likely to choose renewable energy when they know there are clear paths to financing a project’s up-front capital costs.
An experienced financing team can lay out all the options available to consider for your organization and your end clients. Some options may include:
- Financial incentives. Federal and state incentives can help make project costs more attractive. When used in conjunction with traditional financing structures, these programs can reduce the overall cost of a project to accommodate an organization’s cash flow. Businesses interested in financing renewable-energy equipment (such as solar arrays and wind farms) can secure their transactions with the asset
- Loans or leases. These options can offer greater flexibility, in addition to reducing your organization’s capital commitment. When used in concert with the incentives mentioned above, loans and tax leases reduce the bank’s and/or developer’s financial risk. Firms that may not be able to fully and efficiently monetize the potential tax benefits from the underlying energy product may find lease financing a more attractive alternative
- Power Purchase Agreements. PPAs offer an attractive alternative for companies seeking to minimize their initial capital outlay. In a PPA, developers finance the equipment purchase; the client agrees to purchase the power generated by its solar-energy system at a fixed rate, offsetting its existing usage. This typically occurs over a 15- to 25-year term. The PPA may provide immediate and ongoing cost savings and may also act as a hedge to future electricity prices. When the PPA ends, clients can often extend the agreement, buy the equipment outright, or have it removed or replaced
Partner with a leader in renewable-energy financing
“As a community-focused bank, M&T is dedicated to improving the quality of life for our customers, colleagues and neighbors,” says Eric Heintz, Director of Energy Finance at M&T Bank. “Reducing the carbon content of our power generation sources is critical to the future of energy globally.”
Despite local roots, M&T’s footprint in renewable-energy financing stretches from coast to coast. The team has financed projects from New York to California, including the first third-party-financed solar projects under PPA in the state of Virginia and the first utility-scale financing in Maine. And Heintz says the bank expects to see significant growth in Florida and Georgia by the end of 2019.
M&T is ready, willing and uniquely qualified to work with developers and their clients to provide the right financing for their particular situation. The bank has financed a variety of projects from distributed generation applications to utility scale projects in excess of 250 MW in generating capacity.
“We’re growing steadily and thoughtfully in this highly specialized space and have committed to the long-term expansion of the renewable-energy sector,” says Heintz.
Want to learn more?
Contact Eric Heintz at 1-240-632-7880 for more information on financing renewable-energy options.
This article is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.