November 10, 2015
The idea that solar power is limited to those who have the capital to buy the system outright is no longer a reality. In fact, the people who could use discounted, clean energy most are those that don’t have the funds available. Luckily, with new financing and partnerships, being a not for profit is not a problem in the solar industry.
All over New England, schools, churches, charitable organizations and other non-profits are reaping the benefits of solar energy. While non-profit organizations aren’t eligible to take advantage of the tax benefits associated with solar, and many do not have the capital resources to own a system, there’s still opportunity to benefit from solar.
So how is this possible? Through a contract called a Power Purchase Agreement, or a PPA. With a PPA, person or company that owns the system—that is, the person or company who purchases and maintains the physical panels—leases the roof or property that is owned or occupied by the non-profit. The array owner builds the system, and is able to use the tax benefits and state and federal financial incentives associated with going solar; incentives the non-profit would not be able to use anyway. The array owner then sells the solar electricity generated by the system back to the non-profit at a fixed, reduced rate for a set period of time—usually 15-20 years.
This type of system is a win-win for both involved parties; the non-profit gets to cut their operating electrical expenses significantly, and can use the extra money where it really counts—to benefit their programs, mission, and stakeholders. Additionally, the fixed energy cost allows the non-profit to budget energy for the year with certainty, which in today’s volatile energy market is an attractive financial move.
Non-profits can also hit a road block in the path to solar because they don’t own the building in which they operate. However, there are a growing number of commercial real estate owners that will install solar arrays on their building, and offer the electricity to their tenants. In this scenario, non-profits receive the same benefits—reduced, fixed-cost electricity rates and the ability to divert these savings to their programs and missions—and the commercial building owner benefits as well, through the tax benefits, and state and federal incentives available for solar owners. At the same time, the commercial building becomes more environmentally-friendly and attractive to tenants who are looking to make their own businesses and operations more sustainable.
There are a number of paths a non-profit can take to enter into a PPA; the agreements are available through third-party investors, energy consortia, and even through some solar developers! For examples of non-profits Solect has helped go solar, see the slideshow below.
Using solar electricity to power schools, churches, charitable organizations and other non-profits is a growing trend, and one that will pay dividends to the organizations–and the partners that support them–for years to come.