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Local Government Financing Options for “Going Solar”

June 23, 2016
Solar panels

The U.S. Department of Energy has reported that local governments spend up to 10% of their budgets on energy. Solar power is one way local governments can bring down that cost while providing an efficient and eco-friendly alternative to other energy sources. In Georgia, we are perfectly positioned to take advantage of the sun’s rays, and a new state law opens up third-party financing opportunities for Georgia local governments and home owners.

Solar power offers many economic and environmental benefits — increased energy independence, reduced demand on the electricity grid, decreased emissions and job creation. Georgia ranks second, only behind North Carolina, in the Southeast for the amount of installed solar. With the recent legislative support, Georgia’s solar industry is only expected to grow further.

Keeping Down the Cost

Without third-party financing, solar customers previously had to finance the full cost of the solar power system and ongoing maintenance — a difficult task for most. Third-party financing provides for agreements which lock customers into a fixed rate for electricity and allow the system to be used over a set number of years. In exchange, the private companies maintain the system and bear the upfront cost.

With so many financing opportunities now available, the Carl Vinson Institute of Government prepared a report detailing different financing approaches. Many local governments have already installed solar power systems to lower costs for energy intensive services, such as wastewater facilities and schools. As financing flexibility increases, some local governments are finding that going solar can be a practical, long-term financial decision.

Solar power systems can be tailored to meet the needs of each local government — it’s not a one-size-fits-all. While the city of Atlanta announced plans to install solar on over 25 buildings, local governments can introduce solar to their communities more slowly with solar-powered street signs and traffic signals like Dublin, Georgia did in 2012.

Local governments can finance solar through loans, bonds or leases. The Georgia Environmental Finance Authority provides financing for some solar projects at water and sewer facilities, and it is an excellent resource on energy savings performance contracting. The federal government offers several types of bonds specifically for renewable energy, and local governments can issue bonds for solar energy projects like they already do for public parks and schools.

Learn More

The Institute of Government’s report covers the benefits and drawbacks of each financing approach in detail and can serve as a resource for local governments considering solar. This report also provides examples of how some Georgia local governments have already navigated the complex world of solar financing.

For more information on the Institute’s report, contact Shana Jones at

About the Authors

Shana Jones, a faculty member with the Carl Vinson Institute of Government, manages the Planning and Environmental Services unit.



Jessica Alcorn, a University of Georgia Public Service and Outreach Fellow at the Carl Vinson Institute of Government, is currently completing her PhD in Public Affairs.

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