Solar Power for Schools and Nonprofits: What You Should Know

A number of nonprofit organizations, including schools and churches, and starting to be environmental leaders in their communities by using solar power. Nonprofit groups often use large amounts of electricity, and investing in a solar electric system may not be possible, since nonprofits aren’t able to receive the federal tax benefits that are available to commercial organizations.

However, there are states, such as MA, where nonprofits can get solar rebate incentives so that solar panel installation is affordable. Using these incentives, schools and other nonprofits can receive rates that are around 20% lower than typical rebates.

It’s also a good idea to work with a solar energy company that is willing to design a customized system that will maximize the energy of the particular nonprofit or school building while ensuring that the organization can handle the setup costs. Here are a few things you should know.


Purchasing Options

Of course, schools and nonprofits can purchase a solar energy system with cash, but there are also power purchase agreements (PPAs) and commercial solar leases available. These payment options allow nonprofits to get the solar power they need at affordable rates that are offered to other federal agencies.

The commercial solar lease and the PPA are both alternatives to owning or financing a solar system. The provider for the lease or PPA can monetize the federal perks that will offset the cost, and passes these benefits along to nonprofits and schools so that the lease payments are lowered. For the PPA, contracted utility rates are lowered. These purchasing options were put in place to reduce or eliminate the upfront costs that come with installing solar energy, in hopes that more nonprofit organizations will be encouraged to go “green.”

Determining Monthly Costs

Unlike the traditional system of paying an electric bill to a utility company, the cost of solar energy for a nonprofit group or school is determined in advance. This means that nonprofit organizations are able to better plan their budgets accordingly. The sun, which is the power source for solar energy systems, is naturally free, so getting a PPA or lease takes away the unexpected changes in price that are sometimes common with electric companies.

Additional Solar Loan Considerations

If you think your school or nonprofit organization would benefit from a solar energy system, here are some additional solar loan details to consider.

Remember that your monthly savings on your power bill should be more than the monthly payment for the loan, which will help you to save money right away. You can also save between 40 and 70 percent on electricity bills over the duration of your system in comparison to doing nothing at all and using conventional electricity.

Keep in mind that solar loans are similar to other home improvement loans, and have many of the same terms and conditions. Some states will even provide you with interest rates that are below average. The interest on your secured loan is also tax deductible, which means you’ll be saving more on your income taxes.