Solar Energy for Churches, Nonprofits, and Businesses with 30% Direct Pay Benefit
or 30% Solar Tax Credit

The Inflation Reduction Act includes a provision allowing tax-exempt entities to receive the solar investment tax credit as a direct payment. In the past, to make nonprofit solar projects financially viable, most organizations had to partner with developers or banks that were able to  take advantage of the tax benefits. Organizations would sign power purchase agreements (PPAs) where they would pay the bank or developer a set amount of money for the solar energy over a length of time, usually 25 years. Now, tax-exempt organizations like churches, public schools, cities and nonprofits can get those credits by direct pay and receive a check for 30% of the project cost just like a tax-paying entity would receive the income tax credit when filing taxes. Direct pay paves the way for organizations to own solar projects instead of just buying the power through PPAs.

Here are the entities that can access the 30% Direct Pay benefit for their Solar Project.

1. Tax-exempt organizations

Any organization that has filed an application with the federal government for tax-exempt status will qualify for direct pay. This would include churches, nonprofit organizations, state colleges, universities, and more.

2. State, local and tribal governments

Any governmental entities can receive direct pay for their Solar Project. This includes an already-hot market segment — public schools. A 2020 report by Generation180 found 7,332 schools nationwide use solar power, a number that’s surely grown since then.

3. Rural electric cooperatives

Some rural electric co-ops have been leaders in solar adoption because of their member-centric structure. Co-ops now qualify for direct pay, allowing them to own their solar projects and receive credits directly.

How will direct pay change nonprofit solar project financing?

To take advantage of the new direct pay benefit, tax-exempt entities will likely get a customized loan from a commercial solar company or bank. When the 30% direct pay benefit is received, the entity would pay the government’s direct pay incentive back to the loan company, then pay the rest on an installment plan typically over a 25-year period at rates lower than current electric bills.

Commercial Solar can provide your Business or Organization with 100% Upfront Funding for a Business, Church or Nonprofit without Payments for 24 Months and Less than your Current 2022 Payment until Paid Off

If your church or nonprofit organization currently has an average electric bill of $1,000 per month or more, Commercial Solar has financing for your company or organization that provides:

  • No Payments for 24 months (other than the 30% Direct Pay benefit).
  • No Electric Bill (depending on your current electric provider).
  • A Guaranteed, “Locked In” payment lower than your current average electric bill.
  • No Rate Increases for the total Solar “offset” of your energy usage.
  • Your entire system paid off in 25 years at a fraction of the amount you would pay.
  • Increase the value of your building and property.
  • Not based on credit rating, Easy to qualify for funding.

Let Commercial Solar provide your Business, Church, Nonprofit or School with a 100% Free Analysis & Proposal with “No Strings Attached”.