1. Assess your company’s cash situation and how solar fits into it.
Cash is king. Whenever you’re talking to a CFO, the first thing they are going to want to hear are the economics of a project. You want to explain if the solar project makes financial sense from an investment standpoint. If the project doesn’t meet your financial hurdle rates, explain if there are other reasons and benefits for doing the project.
2. Describe the pluses and minuses of the investment structure options available.
There are two main approaches to investing or participating in a solar project. You can own the project outright by investing cash in building the project. Or you can do a power purchase agreement where you’re paying another company a rate for electricity but that company owns and operates the solar equipment. It really comes down to how the CFO wants to use the company’s cash and painting a picture for the choices that the CFO has. What should the balance sheet look like? Does the company have the cash available to invest or does the company prefer to take advantage of the tax benefits that come with solar ownership? Or is it better for the balance sheet to pay for electricity as an expense at a reduced rate? These are all perspectives that you should be ready to speak through and explain.
3. Outline the company time commitment required with the project.
Time is money. CFOs think about workforce productivity as it relates to company economics. You’ll want to answer the question if investing man hours in this type of project is the best use of time for the organization. How much time and resource is required to plan and build the project? Does the company have the resources to manage the project over time?
4. Identify any project risks.
CFOs are also often the chief risk officers and are responsible for risks to the company. It is critically important for anyone having a conversation with the CFO to be upfront and transparent with the risks of the project. Articulating concerns and providing a solution to each issue gives the CFO confidence you are being transparent and have done your homework.
5. Do your vendor due diligence and make the CFO confident you know your stuff.
The vendor that you choose to work with is important. A solar installation is a thirty-year power plant that is onsite at your facility, making it critically important to have confidence in the quality and standards of the company you are partnering with.
6. Be familiar with the viable project alternatives and ready to defend why you think this investment is the best one.
The CFO is going to want to know if you looked at anything else other than the type of project and the vendor that you are recommending. For example, perhaps there are other energy mitigating investments that could be made as an alternative to solar. You may not have to go into full detail on all the analysis that you performed on your other alternatives, but it gives a CFO or decision maker the confidence that you at least thought about other approaches for this this project.
7. If applicable, show how the project ties to your company’s corporate mission.
Some solar projects get done not because of the financial implications but because of sustainability missions or employee benefits. We can use carports as an example. Carports are not the cheapest place to install solar but they provide shade for employee’s vehicles and provide hail protection if you’re in a hail zone. Intangible benefits matter and should be considered. There are other employee benefits that are not necessarily monetized but that engage the workforce. If a workforce comes in and is excited about their company’s mission, they are going to be more productive in their work and proud to work for the company, and therefore stay with the company longer. There are qualitative factors that that go into choices made by CFOs and decision makers. It is a good idea to mention them.
Next time you need to sell a solar project up the chain internally, take the above seven tips into consideration when planning your presentation. You’ll be successful if you provide a thoughtful and informed analysis framed in terms that a CFO cares about.
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