Solar For Nonprofit Organizations
Save on monthly expenses to give back to your community, buy new supplies for your students, or upgrade your facilities.
By going solar, schools, churches, and other non-profit organizations can focus on a mission of sustainability while saving money to support their communities.
Financing options are available to maximize savings by offering a portion of the federal tax return available to other for-profit organizations.
Because the cost of electricity is one of the most expensive parts of running a commercial space, solar panels are becoming an increasingly popular way for businesses to offset their electricity costs both in California and across the nation. While solar is often a popular choice for factories, large corporations, and business parks, using solar panels for electricity is available for smaller organizations such as nonprofits, too.
There are common misconceptions about the price of solar energy, but as the cost of solar panel manufacturing and installation has gone down throughout the years, it is becoming a more attainable energy source for nonprofit organizations to pursue. The reduced costs, in addition to the flexible ownership options, solar grants, and other incentives now available at both the state and local level, make it much easier to pursue a solar energy system than many nonprofits realize.
In addition to offsetting energy expenditures and reducing overhead costs for nonprofits, solar is also a fantastic way to engage with donors and showcase an organization’s commitment to renewable resources. The majority of commercial electricity is sourced from fossil fuels, but by offsetting a nonprofit’s electrical usage with solar energy, they can significantly reduce their organization’s environmental impact. Even if the nonprofit’s mission is not centered around environmental causes, showcasing a commitment to using fewer non-renewable resources is something a community is sure to appreciate.
Benefits of Solar for Nonprofits
Solar energy has become more popular among many groups in recent years due to the multitude of benefits it provides, and for nonprofits, these benefits are extremely important. The financial, environmental, and community benefits associated with solar can help reduce expenses for the organization and aid the community as well, which are values that any nonprofit can incorporate into their mission.
The Financial Benefits Associated With Solar
Every dollar that nonprofits have to spend on overhead costs such as electricity and utilities is a dollar that they can’t spend furthering their work within the community. When nonprofits make the switch to solar, they can offset these utility costs and reinvest that money into advancing their goals. A battery—typically one of the most expensive parts of the solar investment—is not a requirement to make use of solar energy, and any time it is sunny out, the solar panels will be generating electricity for the organization. Additionally, if the panels generate more than what the building is using, the organization can be eligible to sell this energy back to the utility provider and receive credits that are applied directly to the power bill. Because of the year-round sunshine, nonprofits in Southern California are often great candidates for solar panels—and due to rolling blackouts and rising utility costs throughout the state, it can help the organization be less susceptible to these outages and rate increases throughout the years.
The Environmental Benefits Associated With Solar
Around the world, fossil fuels are still the top source of energy, powering everything from our vehicles to our power plants. This non-renewable energy contributes to significant amounts of pollution to our atmosphere every year, and as the planet ages, it is becoming harder and harder for people to offset the impact of this. One of the best ways to reduce the use of fossil fuels is by relying more on renewable energy sources such as solar to power our buildings. Through these small, everyday changes, we can make a big difference in the way that our world consumes energy and puts off carbon emissions.
The Community Benefits Associated With Solar
In addition to the financial and environmental benefits of solar, there are community focused benefits as well. Installing solar is a great way to gain publicity for nonprofits in the community, as it is such a unique and beneficial thing to pursue. Donors will likely be interested in helping a nonprofit achieve its solar mission, and in many cases, installing solar can be good publicity as well. Additionally, choosing a small, local business for the solar installation directly creates jobs and contributes to the local economy substantially.
Primary vs. Third-Party Solar Ownership
The biggest reason why people and organizations are hesitant about solar tends to be due to the misconceptions surrounding its cost. While the price is an extremely valid concern for nonprofits, with multiple options surrounding ownership, solar can be more accessible than previously realized. Between the options of primary or third-party ownership, nonprofits are likely to be able to find a solar solution that fits within their organizational budget.
Primary Solar Ownership
Primary solar ownership is the more traditional route for solar installation. This occurs when a nonprofit organization pays upfront for the solar project, either through financing or in cash. They will own their solar energy system outright, be responsible for maintenance and repairs (which are minimal if there is a warranty involved), and be the recipient of all the financial benefits associated with generating their own energy. This can be beneficial for property values as well, as solar can increase the value of a property once it is installed.
Third-Party Solar Ownership
Through third-party solar ownership (also referred to as Power Purchase Agreements or PPAs), nonprofits have a more flexible option for having solar installed on their buildings. If a nonprofit decides to pursue this route, an investor will cover the cost of the solar energy system, who will then receive the energy and sell it to the nonprofit at a reduced rate. This is not unlike utilizing a traditional electricity company for power—the difference is that it will be cheaper and the energy used will be more environmentally friendly. This scenario is much less of an initial investment but can turn out to be more expensive than simply pursuing primary solar ownership in the long run.
Nonprofit Solar Financing
For traditional consumers, one of the biggest financial draws of solar is the tax credit that is granted after having a solar energy system installed for their home or business—but because of the tax status of nonprofits, they are not eligible for this common financial boost. Fortunately, there are still many options for financing a solar operation for nonprofit organizations.
Third-Party or PPA Options
Third-party or PPA ownership agreements have long been the most popular method for nonprofits because it removes the requirement of making a large, upfront investment to have a solar energy system installed. Through the nonprofit will not own the system outright, they can still benefit from the reduced energy rates and the environmental impact that solar provides without assuming the cost or the liability involved. Many of the organizations that organize third-party or PPA ownership options have a community-centric mission as well, using their profits to help communities and other nonprofits go solar as they grow.
Fundraising in the Community
While fundraising is often touted as the most difficult part of nonprofit work, for a cause like solar panel installation, it might be a viable option. Mobilizing the community to donate for a solar installation can significantly offset the cost, and even if the full price is not covered, donations can make a big impact. Solar energy is generally considered favorable by people, and donors will likely be interested in helping a local nonprofit organization save money and contribute to a less fossil fuel-dependent world.
Financing Through the Solar Provider
Many solar energy providers offer financing that nonprofits can qualify for to help offset the cost of solar energy. These loans often require no or little money down and allow the nonprofit to make monthly payments on the solar energy system that is equivalent to their current energy bill to ensure it is still within the budget. The terms of loans like these can vary, but can often be paid off early if a nonprofit were to experience an influx of funds that can be allocated towards the solar loan.
Solar Grants for Nonprofits
While many traditional solar grants are geared towards residences or for-profit businesses, there are more and more solar grants for nonprofits being made available. In the next section, we will examine these more in detail so nonprofits can determine which grants they may be eligible for.
Solar Grants for Nonprofits
Once traditionally for residential use or geared towards for-profit businesses, grants and other nonprofit solar incentives are being made more accessible as solar energy increases in popularity. For nonprofits with grant writers on staff, it is wise to apply for any and all grants available to nonprofits on a national, state, and local level to garner all the funds possible.
To determine what grants are available to nonprofit organizations, the Database of State Incentives for Renewables & Efficiency (DSIRE) is a great place to start. This site organizes all the grants available in any given part of the country, and also has plenty of information on new policies and procedures surrounding solar energy in the country and the state. This is a resource to check early and often for nonprofit organizations pursuing solar energy, as it will help them make use of any funds that currently exist for that purpose.