Money from the Sky? Property Owners and Lenders Ponder On Site Solar Energy Systems

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Even with recent highly publicized bankruptcies of solar technology companies, such as Solyndra (despite a $535 million federal loan guarantee), significant technological advances have occurred in recent years in the cost effective generation of solar sourced power. In fact, with various governmental incentives, tax credits, and other programs, increasing consideration is being given by owners of commercial and industrial real estate properties to the installation of solar energy generating systems, in order to partially satisfy power needs inexpensively and thereby add to cash flow. In addition, eco-friendly power generation also tends to have an intangible, positive marketing effect with prospective tenants in a challenging rental environment.

Typically, commercial property owners who utilize the expertise of companies specializing in solar energy generation do so through fairly detailed agreements. Often such agreements provide for the installation by the solar energy company of an on site system (usually roofmounted) and for the terms of purchase by the property owner of the solar energy output of the installed system at favorable rates. Agreements may also address a myriad of other business issues crucial to both parties, including, but not limited to the following:

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