1998Practice founded3,969Feasibility studies1,283SBA studies823USDA studies$41.2BProject value evaluatedSince 1982Institutional underwritingMAI · ASA-GC · BCA · CMEAIn-house valuation designations
Wert-Berater, Inc.
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Financing · Solar & Renewables

Solar Farm Financing

Solar projects are financed on contracted cash flow. The panels are commodities and the construction is well understood; what varies is the interconnection position, the offtake, and whether the production estimate is independent. Those three things decide both the structure and the price of the debt.

How these projects are financed

Common financing routes
RouteWhere it fitsWhat it turns on
USDA REAPAgricultural producers and rural small businesses installing renewable energy systems.Grant funds capped at 25 percent of eligible project costs, a maximum RES grant request of $500,000, and combined grant plus guaranteed loan limited to 75 percent of eligible costs (7 CFR 4280.115, 4280.137).
USDA OneRD / B&IProjects in eligible rural areas, where the guarantee helps a lender hold a longer term.Rural eligibility, tangible balance-sheet equity of 10 to 25 percent under 7 CFR 5001.105(d), and a feasibility study above $1,000,000 for a new business.
SBA 504Owner-occupied real estate and long-lived equipment, in a bank plus CDC debenture structure.Eligible fixed assets and the borrower contribution rules, which rise for a new business or a special-purpose property.
SBA 7(a)Acquisition, working capital, equipment and some construction; the most flexible federal route for an operating business.Size standards, owner-occupancy and repayment ability from the business itself.
Conventional bank or credit unionExperienced sponsors with strong balance sheets, and projects too large for the federal ceilings.Coverage, leverage, sponsor liquidity and the appraised value of the collateral.
Tax equity and third-party ownershipStructures where the tax attributes are monetised by a party other than the host.Legal structure, allocation of benefits, and the host’s obligations under the site or power agreement.

What a lender evaluates

  • Interconnection — queue position, study status, and the cost of any network upgrades assigned to the project. This is the most common source of budget surprise.
  • Offtake — a power purchase agreement, net metering arrangement, or on-site load displacement, with the counterparty’s credit examined as carefully as the borrower’s.
  • Production estimate — an independent yield assessment with stated probability of exceedance, not the developer’s own model.
  • Site control — lease or ownership, term relative to the debt, and decommissioning obligations.
  • Equipment and O&M — module and inverter warranties, degradation assumptions, and a funded maintenance reserve.
  • Permitting — local zoning, environmental review and any state siting process, each of which can move the timetable more than the construction schedule.

Where REAP fits, and where it does not

REAP is a cost-share programme, not a project-finance solution. The grant is capped at 25 percent of eligible project costs, and where a REAP grant is combined with a REAP guaranteed loan the combined funding may not exceed 75 percent of eligible costs. That leaves a real equity requirement, and applications that assume the grant closes the whole gap are the ones that stall.

REAP also runs on technical documentation. The technologies the rule names require a technical report in the prescribed format, and the Agency may require a feasibility study for a renewable energy project where the technical report leaves financial, technical or market feasibility unresolved. Details are on the REAP page.

What the credit file has to contain

  • Feasibility study — an independent test of whether the market supports the project at the volumes and prices the projections assume. USDA requires one from an independent qualified consultant for guaranteed loans above $1,000,000 to a new business (7 CFR 5001.306), and SBA lenders order one where the SOP calls for it.
  • Appraisal — a separate discipline from feasibility, and for an operating business it is usually a going-concern assignment that separates real property, equipment and business value.
  • Projections tied to the study — the same volumes, prices and expense ratios the analysis supports, not a second set of numbers built backwards from the debt service.

Our renewable work is described at solar farm feasibility studies, with related analysis at battery storage and microgrid and distributed energy.

Scope of practice. Wert-Berater, Inc. does not arrange, broker or place debt or equity capital, and is not compensated on whether a loan closes. The firm prepares the independent feasibility study, market analysis and appraisal work a lender relies on, for a fixed fee agreed before the engagement begins.

Last reviewed September 2026. Programme figures are quoted from the sources below; everything else is professional commentary.

Frequently asked questions

How much of a solar project can REAP fund?
Grant funds are capped at 25 percent of eligible project costs, with a maximum renewable energy grant request of $500,000 and no more than $750,000 of grant assistance to one person or entity in a Federal fiscal year.
Can REAP be combined with a guaranteed loan?
Yes. Combined grant and guaranteed loan funding may not exceed 75 percent of eligible project costs, and the grant portion remains capped at 25 percent.
What production estimate will a lender accept?
An independent yield assessment stating the probability of exceedance, with the assumptions on soiling, degradation and availability made explicit. A developer's internal model is not usually sufficient on its own.
Does the interconnection cost belong in the feasibility study?
Yes. Network upgrade costs assigned through the interconnection study can change project economics materially, and a study that omits them is not testing the project that will actually be built.
Solar or renewable project seeking debt?

Independent feasibility, production and offtake analysis. Fixed fee quoted in one business day.

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Legal disclosure. Wert-Berater, Inc. offices are mailing addresses only. Following the COVID-19 pandemic the firm has elected to work remotely; its office locations receive mail and are not staffed for visitors or in-person meetings. Headquarters mailing address: 1968 South Coast Hwy, Ste 2382, Laguna Beach, CA 92651.

Wert-Berater, Inc. is an independent provider of feasibility studies and other related services. The firm does not provide financing or equity investment advice, and does not arrange, broker, or place debt or equity capital of any kind.

All appraisal assignments are performed by Bruce E. Jones, MAI, ASA-GC, BCA, CMEA, a member of the Appraisal Institute since 2006, a staff member of Wert-Berater, Inc. and owner of Special Purpose Realty Valuation.

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