Solar Decommissioning Program Bond
A solar decommissioning bond serves as a financial guarantee that solar developers will remove the equipment and infrastructure from a site at the end of the project’s expected 30-year lifecycle.
Also known as solar bonds, this type of contract bond protects the government and taxpayers from having to pay for the reclamation process in case the developer abandons the project.
Bond Coverage & Premium
The cost of a solar decommissioning bond is 5% of the total bond amount. Solar decommissioning bonds are renewed annually until the conclusion of the decommissioning period.
NNA Surety offers a 5% flat rate up to $250,000 obligation. No collateral, credit check, or financials are required up to that amount.
Bond Amount: $250,000
Bond Duration: 1 Year (12 Months)
Bond Issuer: NNA Surety Bonds
Bond Cost: 5% of bond amount
When to Get a Solar Decommissioning Bond
Most jurisdictions require the bond to be posted at the completion of the project, while some require it at the Notice to Proceed stage.
Many developers obtain surety bonds after they have already deposited collateral with the city or county issuing the permit. By posting a bond, developers can get a return of their cash from the government jurisdiction holding it, thus decreasing their costs of capital.
How Solar Decommissioning Bonds Work
The government entity is the obligee and will determine the bond amount, and you as the principal are required to get the bond from a surety. In 25-30 years, when the solar project comes to an end, you’re responsible for decommissioning the project and restoring the environment to its original condition.
Get Bonded With NNA Surety
Surety bonds help you get cash back from government jurisdictions and free up capital you can allocate in other areas of your business. When you’re ready to purchase a solar decommissioning bond, have the following documents on hand:
- Decommissioning Agreement
- Removal Cost Estimate
- Land Lease Agreement
- Land Use Permit
- LLC Agreement (of Asset)
- Required Bond Form (from government entity)
Learn more about the benefits of solar decommissioning bonds in renewable energy projects.