Lease funding model for schools
We are currently offering a standard finance lease with GE Capital Equipment Finance LTD (GECEF) to reduce the upfront cost to schools.
The model below is based on a 4kWp system. Prices for larger systems are likely be lower than those quoted below due to economies of scale.
Summary of model
- The finance lease model, support by the FiT revenues, enables a school to purchase a solar PV system, in the same way that it currently buys other equipment including for example IT or whiteboards.
- A small upfront deposit from the school enables us to match the annual lease payments with the FiT revenue and a portion of the electricity saving from year 1.
- The school saves 2 tonnes of carbon per year for a 4kWp system.
GECEF Finance Lease model:
As with a traditional finance lease, the finance company pays for the system upfront (minus any deposit from the school). The school enters into a finance lease arrangement with the funder to be paid over 15 years. The school uses the FiT and a portion of the electricity savings to cover the annual lease payments. The system is gifted to the school in year 15. The FiT goes on for a further 10 years.
Download a pdf on the lease funding for Solar4schools.
| Finance Provider | School | Solarcentury | |
| Upfront payment for the system (minus any deposit) | Yes | ||
| School deposit* | £2,300 | ||
| Annual fixed lease payment (15 years)** | Yes | ||
| Ownership of solar PV*** | Yes | Yes | |
| Insurance / Risk PV | Yes | Need to notify building insurer but the experience to date is no premium | |
| Ownership of FiT (25 years) | Yes | ||
| All electricity savings | Yes | ||
| Cash positive to the school (minus deposit)**** | Year 1 | ||
| Payback including deposit | Year 15 | ||
| 25 year profit to the school (including deposit)***** | £27,000 | ||
| Delivery, installation, maintenance |
£200 per year increasing 3% annually. Already built into the cash positive and payback numbers listed above |
Yes | |
|
* Based on a 4kWp system. The size of the deposit is approx. £1000 for larger (10 kWp) flat roofs due to reduction in scaffolding costs and economies of scale. ** Annual lease payments of £1500 increasing by 2.5% per year in line with the increase to the FiT which is linked to inflation. *** PV gifted to the school in year 15 **** The FiT payment and the cash savings are modelled to cover the lease payment from year 1. ***** Based on a portion of the electricity savings from year 1 and all of the FiT from year 15 – 25. This does not include electricity savings from year 26 – 50 expected life of the PV system. |
|||