Introduction
A solar plant is a fantastic long-term investment, but it requires a large amount of upfront capital. How do people and companies pay for it? To understand the financial mechanics behind the solar boom, we interviewed Naman Shah, a leading Solar Finance Expert and guest contributor to the industry.
The Cost of Capital
Interviewer: Naman, what is the biggest financial challenge for someone wanting to install solar? Naman Shah: “The biggest challenge is the upfront cost. Solar has no ‘fuel’ cost, meaning power is free once it is installed, but buying the equipment is expensive. The key to solar growth is reducing the ‘cost of capital’—meaning making bank loans cheaper and easier to get for everyday consumers.”