Using green assets to generate energy for a UK business is increasingly attractive. Investing in assets that generate renewable energy will reduce a company’s carbon footprint and often contributes to a significant saving in energy costs over time, especially after the asset is paid off or amortized. The current geopolitical situation has also underlined companies’ need to be confident in their ability to access to energy, which came sharply into focus at the height of concerns about potential energy rationing over the winter.
More broadly, however, these is simply more company demand for sustainability and green asset investments. Companies are keen to move towards greener energy sources, especially as the government has committed to being the first carbon neutral economy in the world by 2050.
As companies look to invest in sustainable and green finance, lenders are moving into the space with specific products to finance sustainability-linked assets.
Solar Photovoltaic (PV) technology financing is offered as a specific product by a single lender as a pilot scheme. Because solar photovoltaic (PV) technology (solar panels) is so expensive to implement, the lender is offering a loan facility to help businesses invest in these green assets, as well as understand demand and how businesses utilize the loans, before they are marketed more broadly.
The funding facility offered by lenders is niche in its application, partially because it is a pilot project and also to allow lenders to ensure the quality of the assets the borrower invests in and the feasibility of the project. They will do this by narrowing how the loan can be used. To this end, the lending is exclusively available for businesses that want to use the loans to invest in PV photovoltaic panels that use crystalline silicon as the primary semi-conducting material.
Under the scheme, any corporate borrowers looking to invest in solar and PV technology can access competitive finance from lenders to fund the project. To be eligible for funding, borrowers must be looking to use the funds to:
Under the scheme, lenders will have specific requirements that the borrower needs to meet. All assets must to be supplied and installed by an MCS accredited supplier or installer, for example. Lenders will also require that at least 50% of the asset costs must be hard asset costs meaning they are identifiable, movable and saleable.
Solar PV technology finance is a niche product on the market at the moment. While the lender offering the facility is keen to do business, they are not openly marketing it as a product, and therefore the only way to access it is through a broker. The benefit of taking part in a pilot scheme like this is that you will benefit from a loan from a highly reputed lender who can offer a facility specifically designed for a particular green asset investment, meaning the loan is structured and optimised specifically for green asset investments – there are no comparable products like this in the market at the moment.
The facility offers competitive rates and terms but will still need to be carefully brokered to ensure you get the best deal. Lenders will want to understand how the green assets will benefit your business and know more about your business’ financial and credit history, cash flow, plans for investment and partners you will use and so on. Enness will be able to help you arrange the loan so that it is as competitive as possible.
As one of the only companies able to arrange solar PV technology financing, Enness can help you be one of the first to access this specific facility, delivering an tailored and competitive loan that will help you make a specific green asset investment.