BusinessHABRenewable energy financing: Renewable energy is growing fast. In the U.S., for example, renewable energy sources like solar, wind, and geothermal have grown by almost 20% in just two years.
That’s incredible growth for a sector of the market that was already booming.
These emerging sectors of the market are set to keep expanding — perhaps even at an accelerating rate — but they’re not growing fast enough to meet the world’s needs.
To get the ball rolling on these cleaner energy sources, financing options are available to make it easier and cheaper than ever before to invest in renewable energy.
Let’s take a look at 10 reasons why you should consider renewable energy financing if you’re interested in going green — or upgrading your current setup — with clean and cost-effective alternatives.
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10 Reasons You Should Consider Renewable Energy Financing
Renewable energy represents an important component of our global energy mix. In fact, renewable power sources have grown significantly over the past decade or so. The rise in renewable energy has been driven in part by favorable tax incentives, as well as other types of green financing programs. With that said, many individuals and businesses still aren’t harnessing the power of renewable energy at home or at work. If you are interested in making your operations more eco-friendly through renewable energy, read on to learn about some pros of green financing programs and why you should consider renewable energy financing to fund your project.
Why You Should Care About Renewable Energy
Before you invest in renewable energy, you should care about it because you want to go green. You want to do your part to reduce greenhouse gas emissions, lower our country’s dependence on imported fossil fuels, and boost the economy by creating local jobs. If you want to know more about the benefits of renewable energy, including reduced water use and less land use, better air quality, and improved health, you can visit the Environmental Protection Agency’s website.
Tax Incentives For Renewable Energy Investments
Tax incentives for renewable energy have been around for more than 20 years. There are currently two main tax incentives designed to support renewable energy – the Solar Tax Credit and the Wind Tax Credit. If you are planning to install solar panels on your home, you could save money on your federal taxes. The Solar Tax Credit began in 2006 and allows qualified homeowners to reduce their federal tax bills by up to 30%. The Wind Tax Credit is available for both commercial and residential wind power facilities. It is a 2.3 cent tax credit for each kilowatt hour generated by a qualified wind energy project. In addition to federal tax credits, many states also offer incentives for renewable energy. Depending on where you live, you may be able to save money on your state taxes by going solar. You may also be able to get assistance with the upfront cost of installing solar panels through a green financing program.
Types of Financing for Renewable Energy Projects
There are many types of green financing options for renewable energy projects. These include loans, lines of credit, and grants. If you plan to use a loan to finance your renewable energy project, you can look for lenders that specialize in green financing. Going with a lender that specializes in renewable energy projects may help increase your chances of getting approved for a loan. You can also consider getting a line of credit for your renewable energy project. This is similar to taking out a loan, but you only make payments when you use the money. Or, you can look into getting a grant to fund your renewable energy project. Grants are not loans, so you don’t have to pay them back. Grants are typically awarded to projects that are deemed to be in the public interest.
Other Benefits of Green Financing Options
There are many benefits to choosing a green financing option to fund your renewable energy project. For starters, a green financing option may help you qualify for federal and state tax incentives. You may also be able to take advantage of green energy financing programs offered by your local utility company. If you are installing solar panels, you should consider using a green financing option. This will allow you to get the panels installed sooner rather than later.
Drawbacks of Going With a Financing Option
One drawback of going with a green financing option to fund your renewable energy project is that you have to pay a loan or a line of credit back. This means you’ll have to come up with regular payments on your renewable energy investment. Another potential drawback is that you may not qualify for green financing programs or the tax incentives that come with them. If you don’t qualify for federal or state tax incentives, you will be required to pay taxes on the full cost of your renewable energy project. The sooner you fund your renewable energy project, the sooner you’ll start generating income.
Bottom line
Overall, there are many reasons to consider green financing options to fund renewable energy projects. You may be able to save money on your federal and state taxes by going solar, or you may be able to get a grant to cover the cost of installing renewable energy equipment at your home or business. If you want to go renewable, you should start by figuring out what equipment is best for your situation. From there, you can look for financing options that fit your budget and meet your needs.
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