How to Fund Your Solar Installation as a Non-Profit
Jun. 30, 2021
Non-profits have much to gain from going solar, from lowering their operating costs to garnering positive community attention. And though installation costs can make it challenging, going solar as a non-profit is absolutely possible.
Here are three ways to fund a solar installation so that you can start saving money on electricity at your non-profit:
Direct Solar Ownership for Non-Profits
Direct solar ownership is the preferred option for most businesses, but it does require sufficient capital. If your non-profit is able to purchase a solar energy system outright, it will be the owner of the system and therefore qualify for certain incentives, including SMART and net metering, which can help generate additional income for your organization. If there are solar power grants for non-profits available in your sector, you may want to consider applying for one.
However, direct ownership isn’t always a viable path towards renewable energy for non-profit organizations. Because non-profits don’t have tax liability, they don’t qualify for the solar tax credit, a lucrative commercial solar incentive that many businesses rely on when installing solar panels. This can make it difficult for non-profit organizations to pay for a solar energy system outright. Thankfully, direct ownership isn’t the only option.
Power Purchase Agreements (PPAs) for Non-Profits
A Power Purchase Agreement (PPA) is an arrangement through which a solar energy system is installed on a host’s property (in this case, the host would be the non-profit) and paid for by a third party that owns the system.
The non-profit host purchases their electricity from the system’s owner at a reduced rate that is locked in for 10 to 20 years, allowing the non-profit to enjoy the benefits of lower electricity costs without spending any money on solar panel installation. In return, the PPA provider receives financial benefits, including any tax credits the system may qualify for which the non-profit may not have been eligible to benefit from.
The energy savings realized from the PPA can then be redistributed towards non-profit programs and fundraising efforts!
Solar Leases for Non-Profits
Solar leases are similar to PPAs, but not exactly the same. With a solar operating lease, you pay a monthly fee to rent solar panels from a lease provider. The solar panels are installed on your property, and you’re able to use the power they generate, reducing your electricity costs, but the lease provider is the owner of the system. You can sign a solar lease for $0 down and will then owe a monthly lease payment. During the 7th year of the lease agreement, you’ll have the option to buy out the system at 15% of fixed amount value. So for example, if your solar energy system cost $35,000 at the time of installation, in year 7 you would have the option to buy it at 15% of the original cost at a price of $5,250.
Boston Solar Can Help Your Non-Profit Go Solar
Have questions about solar energy for your business in the non-profit sector? Boston Solar can help!
We’re the #1 Massachusetts-based solar company, and we’ve helped non-profit organizations of all kinds on their solar journeys.
We believe in accessible solar energy and can help you find a way to make a solar installation possible at your non-profit. Give us a call today to schedule a complimentary solar consultation. We would be happy to answer any questions you have and explain the financing and payment options available to your organization.
Find the right financing option for your non-profit’s solar installation. Call Boston Solar at 617-858-1645 or contact us here to schedule a consultation.