Now is the Time
Now is a perfect time to install solar on your church, synagogue, mosque, or other faith community, with the federal government offering a 30% discount on solar! Read below on solar financing for faith based organizations.
Oak City Baptist Church in NC is putting more towards ministry every month thanks to solar savings.
Federal funding through Direct Pay
Through the Inflation Reduction Act, congregations are now eligible to receive a direct payment from the federal government for at least 30% of the cost of a solar installation.
If a congregation is located in a government-designated “Energy Community,” the tax credit goes up to 40% of the solar system’s total costs, including hardware, labor, and inverters.
An additional 10% is available if the solar installation uses domestically sourced materials. A solar installer would provide this information.
The bonus payments above are automatically awarded as part of the direct payment filing process with the IRS. Also a separate competitive application process can garner further incentives: there is an additional 10% payment for being in a low-income community or on tribal land. (Geographic areas covered by this incentive are determined in a different manner than the Energy Communities, but the two areas may overlap.) And there is an additional 20% payment if the solar panel system provides an economic benefit to low-income households.
How to get paid
Payments from the IRS will not be made until after the solar installation is complete. A congregation will need to register with the IRS and receive a registration number before filing to receive payment. This registration can be done in advance of the installation. During this registration process, a congregation will need to provide information about the congregation, its solar project, and the credits it wants to receive. When the online portal for this registration process becomes available in late 2023, we will provide a link here.
Additional bonus credits for being located in a low-income community or providing an economic benefit to low-income households will have a separate competitive application process. Finally, we will provide guidance on how to document one’s 501c3 status as soon as more information about the requirements becomes known. For a deeper dive into what is currently known about the payment process, check out this article by the Environmental and Energy Study Institute.
Financing the rest
Many denominational bodies have loan or grant programs for improving congregational facilities.
The Cornerstone Fund of the United Church of Christ offers low-interest loans for congregations of any denomination. They have a Creation Care loan for solar. In relation to the Inflation Reduction Act, a loan from the Cornerstone Fund can also serve as a financing bridge until a direct payment is received from the IRS. New and renewing congregations can also be in touch with the UCC’s Church Building and Loan Fund that also has an energy and environmental loan program.
Catholic Energies, a program of the Catholic Climate Covenant, offers Catholic parishes funding options for solar and energy efficiency, including a no-upfront cost arrangement.
The Presbyterian Investment and Loan Program has a Restoring Creation loan program that finances solar.
Download this list of denominational loan services compiled by IPL affiliate Faith in Place.
Green Banks are a way to finance the gap between when you file for your federal funding and when you receive your payment from the federal government. They are mission-driven financing institutions with a mandate to advance the deployment of clean energy.
Financing with no upfront costs
If a congregation does not want to purchase or finance solar panels, it can partner with an investor who pays for the solar system and sells the electricity to the congregation at a discounted rate – often around 10% less. This arrangement is called a Power Purchase Agreement (PPA). The investor benefits from the federal tax credit and incentives, while the congregation reduces its electrical bill. RE-volv is a nonprofit solar financing company that has worked with many IPL congregations nationwide.
There may be other incentives from state, local, and utility entities. Enter your zip code in this database. Some incentives can be combined to lower costs further.
If solar isn’t a good fit for your property, consider investing in community solar. See if there is an option near you by searching Energy Sage’s directory.
Coming soon! Download IPL’s updated Solar Financing Guide for Congregations with detailed information on how the various forms of financing work.
Coming soon! Download a 1-page flyer with highlights from this page.
Find solar congregations in your area by searching IPL’s Congregational Solar map and directory. Don’t forget to come back and list your solar!
View IPL’s 2023 Solar Financing for Congregations webinar recording that features information on the IRA federal funding for solar and RE-volv, a nonprofit solar financing organization that many IPL congregations have used to get solar with no upfront costs.
Contact your state IPL affiliate for localized information.
Thanks to the United Church of Christ for much of the content!
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