March 27, 2023

Solar as a Service – Saving Money when the Sun Shines

The combination of Internet of Things (IoT) technology and the availability of natural energy resources offers a new twist in the development of Pay-Per-Use (PPU) solutions.

One of the key challenges facing finance companies when they consider offering a PPU funding solution is the risk that the customer does not use the equipment as much as was intended, or perhaps not at all, and as a result, transferring asset and credit risk to the funder. 

Historically the way to solve this has been to have a minimum rental requirement, which may be aligned to the depreciation charge in a “no-use” scenario.

Findustrial, a specialist IoT firm and former winner of Asset Finance Connect’s “Fintech Innovator” award, has launched a new initiative that turns this on its head. Working with solarpreneurs and a large local bank in Austria, Findustrial has developed a “solar as a service” lending programme where all lease repayments are directly aligned to electricity generated by the solar panels. The lease repayment is less than the savings made on the company’s electricity bill, so there is a direct and immediate payback for the customer. Projected solar rates, even allowing for inclement weather, more than cover the equivalent of the minimum rental payment that would be expected. 

Findustrial’s IoT technology provides a vital link between the equipment and the lessor, converting usage data into per-use billing data. Of course, there are other issues that the lessor needs to resolve, not least how it can manage variable billing (a challenge that the system providers are, to a greater or lesser extent, looking into). But this real-life use case is an excellent example of a creative PPU application that can provide a competitive advantage for a finance company and its vendor partners. 

There is clearly an uptick in interest in solar PV solutions as businesses suffer from high energy prices. For those looking to expand their renewable energy financing, perhaps Solar as a Service is something to consider. After all, few things are certain in life, but one is that the sun will always be there (even on a cloudy day!).

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