As non-profits around our region struggle to meet budgets due to the pandemic, a new piece of legislation brings a great solution to cut costs and attain sustainability goals. Tax-Exempt organizations in Virginia can now go solar at no cost due to the passage of the groundbreaking Virginia Clean Economy Act. The new policy allows for a funding mechanism called a Power Purchase Agreement (PPA). A PPA is a great way for faith-based organizations and nonprofits to green their buildings without any out of pocket expense.
A PPA leverages the 26% federal incentive tax credit to lower the cost of installation for the solar company. Since tax-exempt organizations cannot use the tax credit, a PPA allows the solar company to own the solar it installs on the nonprofit’s site, generate power, and pass the savings on by selling the power back to the organization at a lower rate than the utility company can.
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Faith-based organizations have traditionally found PPAs to be an opportunity to reach sustainability goals and model environmental values without the investment required for equipment ownership.
Our Lady Queen of Peace Catholic church in Arlington, VA, went solar with Ipsun for this reason in spring 2019, using the VA PPA pilot program. Luc Dewulf, an active parishioner and the church’s spokesperson for the solar project, explained the initiative was prompted partly by Pope Francis’ encyclical on the climate crisis, Laudato Si, as well as by the UN IPCC report.
“We wanted to try to get as much energy as we could from a renewable source,” Dewulf said, “And we could not be happier with the result.”
The benefits of a PPA financing structure are many, but for faith-based organizations or non-profits that run on a tight budget, a key benefit of a PPA-financed solar project is that it means immediate savings on the utility bill. That savings can in turn be put to use helping the people that the organization serves.
Additionally, a PPA structure means the solar company is responsible for installation, maintenance, performance and operating risk. This allows the organization’s leadership to leave the solar maintenance to the experts, leaving more time for the important tasks required to fulfill their organization’s mission.
Thanks to Ipsun Solar for this update.
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