For nonprofits in particular, going solar has become drastically more accessible with the recent passing of the Federal Inflation Reduction Act (IRA). Combined with existing incentives, organizations stand to cover a majority of their solar costs through improved financial programs. Here’s a list of incentives for nonprofits to consider when starting their solar journey:
1: Direct Pay Tax Incentive:
Before the IRA was passed, the Federal Incentive Tax Credit for solar was slated to decrease every year and was not available to organizations that didn’t have a tax burden. Now, the IRA bill has restored the incentive rate to 30% until 2033 and has been made available to tax-exempt groups by offering an option called “direct pay”, where the credit amount is paid out directly to the organization. You can read more about it here:https://www.whitehouse.gov/cleanenergy/directpay/
2: Renewable Energy Certificates (RECs):
This type of incentive offers an on-going production incentive for making renewable energy. These credits behave like stock certificates: they are bought and sold on an open market. They are purchased by the investor-owned utilities such as National Grid and Eversource because utilities need Renewable Energy Credits to meet solar production mandates established by the state’s Renewable Portfolio Standard.
3: Net Metering:
A solar array can reduce or eliminate the cost of any electricity used in the non-profit’s building, but what happens in the winter months when production is lower due to less daylight hours, lower sun angle and snow coverage? Net metering allows excess power created in the summer months to be transferred to the grid and credits your account, to be used in periods of lower solar energy production, keeping the utility bills low or nonexistent.
These building blocks of incentives have ignited new possibilities for non-profits and houses of worship to go solar. Additionally it’s a great opportunity for mission driven organizations to align with the environmental conscious aspects of their values and cut down on their operating costs.
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